33-18-218. Insurer costs prohibited -- duty to defend -- exception.
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/mt/title-33/chapter-18/part-2/33-18-218·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
33-18-218 . Insurer costs prohibited -- duty to defend -- exception.
(1)Except as provided in 33-18-219 and subsection
(2)of this section, an insurer may not recover costs of defending an insured against claims asserted against the insured if the insurer is subsequently determined to not owe a duty to defend the insured.
(2)An insurer may recover costs of defending an insured against claims asserted against the insured when the insurer is subsequently determined to not owe a duty to defend the insured if:
(a)the insurance policy or contract contains language giving the insurer the right to seek reimbursement or recover those costs from the insured;
(b)the insurer provides written notice to the insured that the insurer may seek reimbursement or recovery of those costs from the insured at the time the insurer assumes the defense of the claim or when an insurer discovers facts that lead the insurer to question whether a claim is covered, whichever is later; and
(c)the insurer institutes an action to determine whether the insurer owes the insured a duty to defend within 120 days of determining whether a question exists as to whether a claim is covered under the policy.
(3)The insured has the right to recover, or seek reimbursement of, those costs from a third party pursuant to a contract or agreement or as otherwise provided by law, but only to the extent an insurer has recovered those costs.
(4)Nothing in this section compromises an insurer's right to seek recovery or reimbursement of costs under this section from any party other than the insured against whom the claim has been asserted.