Pennsylvania Supreme Court: General Liability Insurers Have No Right to 'Recoup' Defense Costs from Their Insureds.

Mondaq Business BriefingNbr. 2010, January 2010

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Pennsylvania Supreme Court: General Liability Insurers Have No Right to 'Recoup' Defense Costs from Their Insureds.

On August 17, a unanimous Pennsylvania Supreme Court handed down a decision important not only for Pennsylvania, but potentially for many other states as well. In American and Foreign Insurance Company v. Jerry's Sport Center, Inc.,1 the court ruled that insurers that issue commercial general liability (CGL) policies obligating them to defend any suit that seeks damages to which the insurance may apply, do not have the right to recover defense costs from the insured if a court later determines that the suit does not obligate the insurer t...

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