Researche On The Liability Insurer's Duty To Defend

As the most distinguished system in liability insurance in the 20th century, the duty to defend and settle has not been attached importance under the current Chinese legislation and in the insurance practice, and the above duty has also been a rare target for relevant academic research. This paper takes the duty to defend as the research subject, uses relevant systems in America and English insurance for reference, and demonstrates necessities for establishing the duty to defend in China.Apart from introduction and conclusion, this paper is composed of five chapters.Chapter One: Overview on the liability of insurer's duty to defend. This chapter mainly discusses the definition, necessity and theoretical basis of the duty to defend. The author is of the review that the duty to defend is the liability that the insurer owes to the insured, which do not depend on the duty to indemnify. The theoretical basis of the duty is the principle of good faith and forbidding the abuse of right. Chapter Two: Contents and criteria of the duty to defend. This chapter analyses of the "exclusive pleading rule", the "potentiality rule" and the "comparison test" in detail. The author is in the view that the "potentiality rule" and the "comparison test" shall be combined.Chapter Three: Liability of insurer refusing to defend. If the insurer does not fulfill the duty to defend, he shall bear the compensation liability to the insured. Moreover, if the insured defends by himself, the insurer shall not be exempted form the duty to indemnify on the basis that the insured does not defend properly or the does not appeal.Chapter Four: Conflict of interests between the insurer and the insured. When such conflict arises, the lawyer representing the insurer shall recognize the conflict as soon as possible, and understand his obligations to the insured. The duty to defend is not absolute. It can be transferred to the duty to inform and the duty to bear the costs of defending when the conflict arises.Chapter Five: Application of the duty to defend in China. This chapter discusses the need to introduce the system under current Chinese legal environment. Based on the above discussion, the author gives advice on how to implement the duty in China.