In a recent decision, Georgia law as applied in that case matched national rules and decided the outcome. First, an Insurer could not both deny a claim for defense and attempt to reserve the right to assert a different defense in the future. Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *5 (M.D. Ga. March 29, 2013).
In that case, the Federal Court held that the Insurer did not deny a claim for defense. It was instead a claim for advancement of defense costs which were not covered, and so there was no breach of contract when the Insurer did not advance those defense costs.
Second, defense coverage depends only on the allegations of the underlying liability complaint. Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *9 (M.D. Ga. March 29, 2013).
In this case, the Federal Court held that the allegations of the ULC did not trigger defense coverage.
Finally, since there is no Coverage in this case, the Federal Court concluded that not only the breach of contract claims should be dismissed, so should the claims for alleged Bad Faith be dismissed as well. Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *11 (M.D. Ga. March 29, 2013).
Please Read The Disclaimer.