3 AAC 26.520 - Indemnity policy with a defense cost obligation

(a) A policy under which an insurer has neither a right nor a duty to provide a defense but agrees to indemnify an insured for the costs of defense for liability for which the policy also provides coverage must provide coverage to indemnify an insured for the payment of attorney fees taxed as costs against the insured under Alaska Rule of Civil Procedure 82,

(1) except as provided in 3 AAC 26.525 and 3 AAC 26.535; and

(2) subject to the following minimum limits:

(A) as an additional amount of coverage, a policy that indemnifies an insured for the costs of defense in addition to an applicable limit of liability must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 that is not less than the amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage;

(B) as an additional amount of coverage, a policy that indemnifies an insured for the costs of defense within an applicable limit of liability less than $1,000,000 must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 t)iat is not less than the greater of,

(i) an amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage; or

(ii) $10,000;

(C) a policy that indemnifies an insured for the costs of defense within an appHcable limit of liability of $1,000,000 or more may include within its applicable limit of liability coverage for attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82.

(b) A policy under which an insurer has neither a right nor duty to provide and has not agreed to indemnify the insured for the costs of defense against a liability for which the policy also provides coverage is not required to provide coverage for the payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82, except as required in 3 AAC 26.535.

Notes

3 AAC 26.520

Eff. 7/1/96, Register 138; am 12/20/2020, Register 236, January 2021

Authority:AS 21.06.090

AS 21.36.900

AS 21.42.120

AS 21.42.130

AS 21.42.160