Gibson v. Northfield Insurance

STARCHER, J.:

In this appeal from the Circuit Court of Kanawha County, we are asked to examine a “defense within limits” provision in an automobile liability insurance policy purchased by the City of Charleston. In a typical liability insurance policy, the insured receives indemnification up to the policy limits under one portion of the policy, and an unfettered defense against claims in another portion of the policy. But in a defense within limits policy, all costs of defense are chargeable against, and thereby erode or reduce, the indemnification policy limits. When the policy limits are…