Companies purchase insurance for litigation protection in the form of an insurer’s duty to defend lawsuits. Under New Jersey law, the duty to defend begins with the filing of a complaint that includes allegations that might trigger coverage.

However, a recent N.J. Supreme Court opinion, Norman International, Inc. v. Admiral Insurance Co., relied on a narrow exception to that general rule -- first advanced in Burd v. Sussex Mutual Insurance Co. -- to deny a defense to an insured.

Finding that a clearly defined coverage issue could only be resolved from facts outside the complaint and would not be resolved in the underlying case, Norman allowed the insurer to rely on extrinsic evidence to negate a defense obligation.

Though aggressive insurers will, unfortunately, try to use Norman to abandon their insureds at the outset of a litigation, Norman is not a free pass for insurers to sit on the sidelines when their insureds most need access to insurance. Indeed, Norman left untouched two key tenets of New Jersey’s duty to defend.

First, if a plaintiff files an unartfully pled complaint and the allegations are ambiguous to trigger coverage, insurers must still provide an immediate defense. Second, that immediate defense continues unless and until concrete evidence is uncovered that definitively takes the underlying case outside of coverage.