Nevada Prohibits “Defense Inside the Limits” Liability Insurance Provisions | The D&O Diary

In an interesting development, the Nevada legislature has passed, and the Nevada governor has approved, a Bill that prohibits insurers from issuing policies containing a provision that reduces the limit of liability by the costs of defense. I suspect that many in the liability insurance industry are unaware of this legislation prohibiting defense- inside-the-limits liability insurance. I also suspect that, for reasons discussed below, the new legislation will generate disruption in the professional liability and management liability insurance market in Nevada when it goes into effect on October 1, 2023.

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All I know is that Nevada insureds are about to experience a real-world experiment in the dynamics of the liability insurance marketplace. If what happened in Quebec is any guide, I suspect the Nevada insureds are really going to hate what comes next.

Source: Nevada Prohibits “Defense Inside the Limits” Liability Insurance Provisions | The D&O Diary