Insurance Tender: Getting Your Carrier to Defend

First, inventory every policy that might respond

The instinct is to tender to the one obvious carrier and stop. Resist it. Coverage often comes from a policy nobody thought of — or from someone else’s policy entirely. Before you write a single tender letter, build the inventory. For each line, pull the actual policy (not the certificate or the binder) and note one thing that changes everything: whether it is occurrence-based or claims-made.

That distinction governs when coverage is triggered and how fast you must report. An occurrence policy responds to events that happened during the policy period, whenever the claim surfaces. A claims-made policy responds only to claims first made — and usually reported — during the policy period or an extended reporting window. Miss the reporting window on a claims-made policy and there may be no coverage at all, however strong your defense to the underlying claim.

• CGL (commercial general liability). Usually occurrence-based. Bodily injury, property damage, and often personal and advertising injury.
• D&O (directors & officers). Claims-made. Management liability, often with entity coverage. Watch the reporting window.
• Professional liability / E&O. Claims-made. Errors and omissions in rendering professional services.
• EPL (employment practices liability). Claims-made. Discrimination, harassment, retaliation, and wrongful-termination claims.
• Cyber. Claims-made. Data incidents, privacy claims, network liability, often with first-party costs.
• Commercial auto. Typically occurrence-based. Anything arising from use of a vehicle.
• Umbrella / excess. Generally follows the form of the policy it sits above. Put these carriers on notice even if you are nowhere near the underlying limits yet.
• Others’ policies on which you may be an additional insured. See Step 3 — the most-missed source of someone else’s defense dollars.

Then work the sequence

1. Tender promptly — treat late notice as the enemy.

   Late notice is one of the most common ways to forfeit coverage you bought and paid for. On claims-made policies the reporting window can be unforgiving; on occurrence policies, many states require the carrier to show prejudice before it can deny on late notice, but you do not want to be the case that tests where that line falls. The cost of an early tender is essentially zero. The cost of a late one can be the entire claim. When in doubt, notice it.

2. Tender to every potentially responsive carrier, not just the likeliest one.

   A single lawsuit can implicate two or three policies at once — a slip-and-fall that also pleads negligent supervision, a contract dispute that also alleges defamation. Tender to each carrier whose policy might respond and let the carriers sort out priority among themselves. Send each tender in writing, attach the complaint or demand, and ask the carrier to confirm receipt and assign a claim number. Calendar a follow-up; silence is not acceptance.

3. Check whether you are an additional insured on someone else’s policy.

   This is the step most in-house teams skip, and it is often where the defense actually lives. Vendor, supplier, contractor, and customer contracts routinely require the other side to name you as an additional insured and to defend or indemnify you for claims arising from their work. If a claim traces back to a counterparty’s product, service, or premises, you may be entitled to a defense from their carrier — sometimes ahead of your own. Read the actual additional-insured endorsement, not just the certificate of insurance; the endorsement’s wording controls, and it is frequently narrower than the certificate suggests. Then tender to the counterparty and its carrier directly, citing both the insurance and the indemnity provisions. Demand Letter Triage covers how to surface these obligations in the first week.

4. Lean on the duty to defend — it is broader than the duty to indemnify.

   These are two different promises, and the defense one is far easier to trigger. In most states the duty to defend turns on whether the allegations are potentially within coverage — not on whether the claim has merit, and not on what actually happened. If any part of the complaint states a claim that could fall within the policy, the carrier generally must defend the entire suit, often subject to a reservation of rights. So read the complaint against the policy looking for any covered theory, and frame the tender around the potential for coverage rather than conceding the carrier’s preferred narrow reading. (How far a court will look beyond the four corners of the complaint varies by state.)

5. Read the reservation-of-rights letter carefully — and watch the counsel question.

   Most carriers agree to defend under a reservation of rights, preserving their ability to contest indemnity later. Read which exclusions and coverage defenses the carrier reserves on; those signal where it intends to fight, and sometimes where it intends to deny. A genuine conflict between insurer and insured — for example, where the reservation gives the carrier an incentive to steer the defense toward uncovered theories — can entitle you to independent counsel at the carrier’s expense, rather than the carrier’s appointed panel counsel. Not every reservation creates that conflict, and the standard, the label, and who pays vary by state (California calls it Cumis counsel). Confirm the rule in your jurisdiction and raise the conflict in writing if one exists.

6. Do not admit liability or settle without consent where the policy requires it.

   Most liability policies contain a consent-to-settle or no-voluntary-payments condition. Admitting liability, settling, or making payments toward a claim without the carrier’s consent can void coverage for that claim — even a settlement that looks like a bargain. Route settlement discussions through the carrier, get consent in writing, and document the carrier’s position if it unreasonably withholds it.

7. Preserve the claim by cooperating fully.

   Policies impose a cooperation duty: provide the documents and information the carrier requests, make witnesses available, and keep the adjuster current. Cooperate substantively and on time. A carrier looking for a way out will use a cooperation failure, and unlike a coverage dispute, that one is your own doing. Keep a clean file of every tender, acknowledgment, reservation letter, and request — the correspondence record is what you will rely on if the carrier later tries to walk the coverage back.