Although Illinois caselaw appears to suggest there is no duty to defend an insured (including an additional insured) before a suit, an insurer has a good-faith duty to its insured to respond to a demand made before suit and will often rely on two “black letter” rules to determine their responsibility. One rule is that they have no obligation to pay defense costs incurred before the insured tenders the claim to the insurer; the other rule is that the insurer owes no duties to the insured until the insured is sued. In his January 2020 Illinois Bar Journal article, “Tender-Hearted Insurers,” Scott O. Reed explains that while both rules are a rough approximation of the limits Illinois courts have placed on a liability insurer’s early-stage duties in a claim, caselaw contains exceptions and qualifications to those rules. Reed suggests that knowing the contours of these guides to an insurer’s early-stage duties will allow counsel for insureds and insurers to make informed recommendations to their respective clients about how to resolve conflicts over early-stage costs and settlements.

Read more in the January Illinois Bar Journal.