Insurer Has No Duty to Defend Lawsuit Involving Only Nonmonetary Dispute

  The Fourth Appellate District holds that “[w]hen an insurance company issues a liability policy, agreeing to indemnify its insured against a third party claim for damages covered under the policy, and to defend the insured against any such claim,” the insurer’s duty to defend the insured against a third party lawsuit does not extend to a suit seeking injunctive relief only, where no compensatory damages are sought.

  “The third party’s failure to seek compensatory damages against the insured means the dispute is not a claim for damages under the policy.  The insurer’s defense obligation requires it to provide the insured with a defense against a claim seeking damages potentially payable under the policy, not to defend the insured’s honor or otherwise assist it in resolving a nonmonetary dispute.” San Miguel Community Assn. v. State Farm.

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