Jenner & Block

Supreme Court of Nevada Rules that Policy Limits Do Not Cap Damages Flowing from an Insurer’s Breach of the Duty to Defend

In a recent opinion, Century Sur. Co. v. Andrew, the Supreme Court of Nevada concluded that when insurers breach their duty to defend, policyholders may be entitled to consequential damages that are not capped by policy limits, even without any showing of bad faith. 134 Nev. Adv. Op. 100 (2018). The amount of consequential damages is a question for fact finders to answer by determining how much damage naturally flowed from the breach of the insurer’s duty to defend. Policyholders with duty to defend policies applying Nevada law should take note of this decision and that when confronting an insurer’s breach of the duty to defend, it is possible to recover amounts both in addition to the policyholders’ defense costs and above policy limits.

Read more.