What is true regarding the duty to defend in insurance policies?

The duty to defend in insurance policies is indeed broader than the duty to indemnify. This means that an insurer is obligated to defend its insured against any claims that could potentially fall within the coverage of the policy, even if the claims are ultimately unfounded or if the insured is not found liable. The rationale behind this broader duty is that the defense of legal actions can be complex and costly, and it is part of the insurer's role to provide protection for its insured during such proceedings.

Unlike the duty to indemnify, which is limited to instances where the insurer is liable to pay damages under the terms of the policy, the duty to defend is triggered by the mere possibility of coverage. This ensures that the insured does not have to navigate the legal process without support, reflecting the insurance principle of protecting the insured’s financial interests in various situations that may arise.

Other choices suggest narrower interpretations of the duty to defend. For example, limiting the duty to instances of established liability or basing it solely on negligence claims does not capture the full scope of the insurer's responsibility to defend its clients against legal actions. Ensuring an expansive approach to the duty to defend allows insured parties to focus on their legal issues without the burden of also managing their defense costs.