In addition to insurance companies’ broad duty to defend all claims arising from complaints seeking damages potentially covered by their policies, Pennsylvania law provides an opportunity for policyholders to have their insurance companies pay for litigation costs associated with claims and/or suits that overlap or are intertwined with a suit the insurance company is already defending.
The magic words are “inextricably intertwined”
Policyholders may seek defense costs for related litigation if those claims are made as: (1) counterclaims in suits the insurance company is already defending, or (2) separate, independent lawsuits with facts or defense work that overlap with a suit the insurance company is defending. The insurance company’s duty to defend such related claims is not automatic, however. Pennsylvania courts make it clear that in both instances, the cases or claims must be “inextricably intertwined” in order to trigger the insurance company’s obligation to pay litigation costs.Continue Reading Insurers must foot the bill for “inextricably intertwined” counterclaims in Pennsylvania