Insurance Briefs: Insurer Owes Defense Until It Doesn’t

Nat’l Surety Corp. v. Immunex Corp.
(Wn. App. Div. 1)
Immunex and others were sued in several cases alleging that certain drug manufacturers artificially inflated their wholesale prices.  Immunex notified its umbrella and excess insurer, National Surety, of related issues, but did not notify National of the lawsuits or provide copies of the complaints until approximately five years after the complaints were filed.  National filed a declaratory judgment action, seeking a ruling to determine whether National had a duty to defend Immunex.  The trial court (Judge Steven Gonzalez) held that National had a duty to defend until the trial court ruled that there was no coverage, unless National could prove that Immunex’s late notice of the lawsuits actually prejudiced National.  Division 1, in an opinion authored by Judge Appelwick, affirmed.  The ruling was based on the court’s reasoning that the duty to defend was broader than the duty to indemnify; therefore, where the allegations of the complaint triggered a duty to defend, that duty to defend remained in effect until the court issued its final declaration of no coverage.

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