15.1 Policy construction

15.1.1 Duty to defend

Where there is a duty upon the insurer to defend the insured (“duty to defend”), the preclusion of coverage at the stage of defence is very unlikely. The general principle is that duty to defend policies, being broader than duty to indemnify (also known as “non-duty to defend”) policies, require the insurer to defend potentially covered claims, though this does not extend to non-covered claims.1 An advancement will not be necessary in duty to defend policies, since the insurer is in charge of the defence. This is effected by a “Claims control” clause (or similar wording) with mandatory wording (thus imposing the duty). This form of compulsory agency requires that the insurer directs any litigation in the insured's interests and not the insurer’s;2 in defending an insured, the insurer must act in good faith.3