Campbell v. Superior Court

In Campbell v. Superior Court (1996) 44 Cal.App.4th 1308, the court discussed the policy reasons for making tort recovery available to an insured who has been denied a defense. "It is undeniable that insurance is purchased to provide the peace of mind and security that comes from knowing that if the insured contingency arises, the insurer will defend against the claim. Stated another way, one of the primary benefits of an insurance policy is that the insured can expect the insurer to defend against third-party claims. It therefore follows that if an insurer unreasonably fails to defend, it has breached the implied covenant of good faith and fair dealing." (Ibid.)