Arceneaux et al v. Amstar et al.

The duty to defend in long-latency cases may not be “pro-rated.” This rule is consistent with the insurance policy language at issue and well-settled Louisiana jurisprudence, but also with principles of equity, fairness and public policy. The duty to defend and the duty to indemnify are distinct duties to which different standards apply. The rule is that if any of the claims in the action are potentially covered by the insurance policy, the insurance company must defend the entire action and may not “pro-rate” its defense obligation. UP reminded the court that the duty to defend “is not merely ancillary to the duty to indemnify but, rather, is an integral component of the raft of protection afforded by a liability policy. Many insureds purchase liability insurance for the peace of mind that comes with knowing that their insurer will defend them if they are sued in an action that comes within the scope of protection provided by their policy.” Accordingly, the duty to defend is often referred to as “litigation insurance.” It is broader in scope than the duty to indemnify.