Experienced insurance practitioners’ eyes may glaze over when faced with the oft-cited phrase, “the duty to defend is broader than the duty to indemnify.” This statement is cited so frequently in tender demand letters that the true meaning can become obscured. In New York, this generally means that a liability insurer owes a duty to defend if the allegations of the pleadings, if true, potentially fall within the scope of the risks undertaken by the insurer.
However, what does “potentially” actually mean in practice, particularly in the context of additional insured demands? Further, is the plaintiff’s employment status with the named insured enough, on its own, to always “potentially” trigger that duty?
