Defense Costs

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Coverage of legal defense costs, charges, and expenses is usually separately described elsewhere in the policy and may include the cost of appeal, attachment, and similar bonds. An insured may be covered for legal defense in one of two ways. Most policies provide “defense expense” coverage. “Defense expense” coverage provides for reimbursement of defense costs incurred by the insured. This allows the insured to choose legal counsel (subject to the consent of the insurer, which cannot be unreasonably withheld) and to exert control over the case. The second type of legal defense coverage is “duty to defend” coverage, requiring that the insurer provide the defense.