Scope: The “Comparison Test” -

The defense obligation arises when a defense is needed: at the outset of the suit. It follows that, unlike the duty to indemnify (which depends on the “true” facts as they are determined in the underlying action), the duty to defend arises from the facts as alleged in the complaint. See Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 847 (1993); Magoun v. Liberty Mut. Ins. Co., 346 Mass. 677, 681 (1964). The process for determining the defense duty—often spoken of as a “comparison test”—is one of “envisaging what kinds of losses may be proved as lying within the range of the allegations of the complaint, and then seeing whether any such loss fits the expectation of protective insurance reasonably generated by the terms of the policy.” Cont’l Cas. Co. v. Gilbane Bldg. Co., 391 Mass. 143, 147 (1984) (quoting Sterilite Corp. v. Cont’l Cas. Co., 17 Mass. App. Ct. 316, 318 (1983)). Once the defense obligation arises, it ordinarily continues until the suit is resolved—notwithstanding that the facts proved at trial ultimately may show the liability to be outside the scope of coverage. See Magoun v. Liberty Mut. Ins. Co., 346 Mass. at 681–82.

Originally published in Massachusetts Liability Insurance Manual - Comprehensive Coverage, Expert Guidance 3rd Edition 2017 on October 19, 2017.