Attorneys Liability Protection Society, Inc., a Risk Retention Group, Plaintiff, Cross-Appellant/appellee, V…

Summary

The Alaska Supreme Court answered both certified questions affirmatively, holding that Alaska law bars enforcement of an insurance-policy provision requiring reimbursement of defense fees and costs incurred while the insurer defended under a reservation of rights. The prohibition applies both when the insurer had a duty to defend but the claims were later determined to be excluded and when it was later determined that no possibility of coverage existed. The court relied on the statutory allocation of defense expenses, legislative history, and the statutory purpose of protecting the insured's right to independent counsel.