Insurance terminology explained in simple terms
Defence Expenses (Indemnity Insurance)
Defence expenses are the costs incurred in defending against an (unjustified) claim. This includes both out-of-court and court expenses, such as: lawyer, court or expert expenses as well as witness expenses or travel expenses.
Defence expenses are paid by the insurer as part of passive legal expenses insurance.
The costs for claims settlement or defence are paid by the insurer in addition to the insured sum/coverage sum (upper limit of benefits), as long as this sum is not exceeded in the compensation payment. If the liability claim exceeds the aforementioned upper limit, the insurer only bears the costs to the extent that they would have been incurred in the event of a liability claim in the amount of the upper limit. In the case of claims in US courts, the costs are usually limited to the insured sum.
(related terms: passive legal expenses insurance
Term: Defence Expenses (Indemnity Insurance)
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