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State high court rules insurer can claw back defense costs

March 12, 2021

An insurer that paid defense costs for a policyholder involved in a liability dispute can recoup those costs if it is later determined that it did not owe a duty to defend the case, a divided Nevada Supreme Court ruled Thursday.

The Nevada high court ruling in Nautilus Insurance Co. v. Access Medical LLC et al stemmed from a certification order from the 9th U.S. Circuit Court of Appeals, which noted that the Nevada Supreme Court had not ruled on the issue and that other state courts were inconsistent on the issue of reimbursement of defense costs.

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