SL Indus., Inc. v. Am. Motorists Ins. Co

In SL Indus., Inc. v. Am. Motorists Ins. Co., 128 N.J. 188, 214-15, 607 A.2d 1266 (1992), it was established that "when the insurer has wrongfully refused to defend an action and is then required to reimburse the insured for its defense costs, its duty to reimburse is limited to allegations covered under the policy, provided that the defense costs can be apportioned between covered and non-covered claims." If the defense costs cannot be apportioned, the insurer bears the costs of defense in their entirety. Id. at 215, 607 A.2d 1266.