“When Connecticut law governs the interpretation of a liability policy, a carrier would be wise to consider the impact of a recent Supreme Court of Connecticut decision, Nash St., LLC v. Main St. Am. Assur. Co., before reaching a decision regarding its duty to defend,” writes Goldberg Segalla’s Jason E. Rusche in an article in the Spring 2021 issue of The Brief, the American Bar Association’s magazine for lawyers practicing tort and insurance law.
With in-depth discussion and evaluation of Nash St., Jason, a member of Goldberg Segalla’s Global Insurance Services group based in Hartford, details the reasoning behind the Connecticut Supreme Court’s decision, examines the questions the court left unanswered, and explores the impact of Nash St. on the duty to defend in Connecticut.
“In determining a carrier’s duty to defend, Connecticut, like many other jurisdictions, follows the ‘four corners’ rule,” Jason writes. “The four corners rule holds that a liability carrier’s duty to defend depends on the allegations asserted in the underlying complaint, and, with limited exceptions, a carrier is prohibited from relying on evidence extrinsic to the four corners of the complaint to deny coverage. Accordingly, where the allegations of the complaint in the underlying lawsuit create some factual uncertainty and there is a reasonable possibility that indemnity coverage may ultimately be available to the insured, the carrier has a duty to defend the lawsuit.”
However, in Nash St., the Supreme Court of Connecticut expanded a liability carrier’s duty to defend to situations where the allegations of an underlying complaint do not create any factual uncertainty but do create legal uncertainty. He also addresses the legal and practical consequences that will flow from Nash St., including steps cautious carriers may take, pointing out that the stakes for properly determining their defense obligations are exceedingly high in Connecticut.
“Connecticut Is Certain Legal Uncertainty Triggers a Carrier’s Duty to Defend,” The Brief, Spring 2021 (subscription required)
Jason E. Rusche represents and counsels clients in insurance and reinsurance coverage matters and litigation as well as underlying personal injury and commercial litigation. Jason has extensive experience handling complex coverage disputes for insurers under a wide range of insurance policies and coverages (historical, admitted and non-admitted), including pollution and remediation liability, professional liability, commercial general liability, umbrella, excess, commercial property, builder’s risk, commercial auto, personal lines, and various specialty lines, including manuscripted policies. A seasoned litigator, Jason has a wealth of experience representing clients across numerous industries in environmental, mass tort, toxic tort, premises liability, professional liability, product defect, construction, and transportation litigation.