What does the 'duty to defend' refer to in insurance policies?

The 'duty to defend' in insurance policies refers to the obligation of an insurer to provide a legal defense for the insured in the event of a claim that falls within the scope of coverage. This duty is a fundamental aspect of liability insurance and is significant because it arises whenever there is a potential for coverage under the policy.

When a claim is made against the insured that could potentially lead to a covered loss, the insurer is required to appoint and pay for legal representation to defend the insured, even if the claims may ultimately be found to be without merit. This duty is broader than the duty to indemnify, which involves paying for damages that the insured is found legally obligated to pay. The 'duty to defend' is crucial because it helps protect the insured from the potentially high costs of legal actions that could arise, ensuring they have adequate representation throughout the legal process.

The other options do not accurately describe the 'duty to defend.' For instance, while the insurer must pay for damages, this is separate from the obligation to defend the insured in court. Additionally, an insurer's right to refuse a claim is not synonymous with providing a defense, and the insured hiring their own legal representation is not a standard covered obligation by the insurer under the