Making the Decision to Defend – 2
If the adjuster finds, after a thorough investigation, that there is no potential of coverage, he or she must recommend denial of defense and indemnity. If a decision is made to refuse defense or indemnity, the adjuster must be convinced that he or she, on behalf of the insurer, has thoroughly investigated the foundation of its denial. A less-than-thorough investigation may cause the insurer to refuse defense in error and will expose it to claims for extracontractual damages from its insured.
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