If the Complaint Can Be Amended to State a Covered Claim, There Is a Duty to Defend

In Millennium Laboratories, Inc. v. Darwin Select Insurance Company, 2014 WL 1921755 (S.D. Cal. May 13, 2014), the Court held that an insurer must defend if the factual allegations of a complaint give rise to coverage, even if causes of action that relate to those claims are not alleged in the complaint.  The significance of this ruling is that it further substantiates California law that provides all facts in a complaint are to be examined in the coverage determination by insurance carriers.  Previously, standard operating procedure for insurance adjusters was to review the complaint and determine if the causes of action there alleged implicated coverage.  After the Millennium decision, the operative inquiry will be to review the allegations and decide whether they give rise to un-alleged claims or causes of action.