Must an insurance company defend the entire case where some claims are covered but some are clearly not covered? General liability insurers must, title insurers do not have to according to a 2013 decision by Massachusetts SJC.

A flap arose when by mistake, a deed was recorded before a mortgage.   The right to enforce payment of the note was lost. This led to claims the title insurer did cover and to claims title insurance never would reach.  Should the insurer be required to defend all claims?

The general rule in Massachusetts is that an insurer must defend an insured even if some of the claims alleged are not covered (such as intentional acts).  If the carrier has a duty to defend any, it has the duty to defend all the claims.

This “in for one, in for all” rule does not apply to title insurance as it turns out.  Title insurers are not bound to defend non-covered claims.  Title insurance is aimed at risks that are in existence when the policy is issued.  Whatever a title search shows, that is what title insurance covers.  Title insurance is a specialized undertaking it is risk eliminating.

General liability insurance on the other hand is risk assuming; it covers claims and provides a defense if any of the claims is even arguably covered. 

Here is the citation to the case that announced this rule under Massachusetts Law. GMAC Mortgage v. First American Title Insurance Company 464 Mass 733 (2013)