As we all know, the standard governing an insurer’s duty to defend is broad, but how broad is it? The answer: exceptionally broad. Insurers often lose duty-to-defend disputes not because coverage is ultimately established, but because courts apply an expansive standard when determining whether a claim is potentially covered. The following two cases illustrate the breadth of that standard and show how courts evaluate whether a potential for coverage exists and whether it is sufficient to trigger the duty to defend.

In Bradley Land Co. v. Travelers Prop. Cas. Co. of Am., No. 2:25-cv-10605-DSF-JDE, 2026 WL 2548594 (C.D. Cal. 2026), the court considered whether Travelers Property Casualty Company of America (“Insurer”) had a duty to defend Bradley Land Company (“Insured”) in an underlying personal injury action. The underlying plaintiff alleged that he suffered cardiac arrest and other injuries after being exposed to hydrogen sulfide gas at a job site owned by the Insured. The Insurer denied coverage based on a pollution exclusion barring coverage for bodily injury arising out of the discharge, dispersal, seepage, migration, release, or escape of pollutants at or from premises owned by the Insured.

The court explained that, under California law, the duty to defend is broader than the duty to indemnify, and an insurer must defend whenever the underlying allegations or known extrinsic facts establish a potential for coverage. Applying MacKinnon v. Truck Insurance Exchange, 31 Cal. 4th 635 (2003), the court held that the pollution exclusion applies only to injuries arising from events commonly understood as environmental pollution. Although hydrogen sulfide may qualify as a pollutant under certain circumstances, the underlying complaint did not establish how the gas was released or how the plaintiff was exposed to it. Because the allegations could reasonably encompass an injury resulting from an allegedly defective warning or other ordinary negligence, the Insurer could not establish that the pollution exclusion plainly and clearly barred coverage. The court therefore concluded that unresolved factual questions left open a potential for coverage, triggering the Insurer’s duty to defend. Bradley Land Co., 2026 WL 2548594, at *4–9.

Additionally, in Insoft, Inc. v. Hiscox Ins. Co., No. 25-12533, 2026 WL 2568349 (11th Cir. July 6, 2026), the court discussed whether the insurer, Hiscox Insurance Company (“Insurer”), had a duty to defend Overwatch (“Insured”), a security company.  In this case, the Insured sought coverage under a professional liability policy after being sued in connection with bullying and an attempted sexual assault of a student during a school trip. However, the Insurer denied a defense based on the policy’s sexual misconduct exclusion, which barred claims “based upon or arising out of” sexual abuse, molestation, harassment, or similar conduct. The plaintiff and Insured settled, and then the plaintiff filed this action against the Insurer in an attempt to collect from the insurance policy.

The Eleventh Circuit acknowledged that, under Florida law, the phrase “arising out of” is interpreted broadly and requires only some causal connection greater than mere coincidence. Nevertheless, the court held that the district court improperly resolved competing inferences against the insured. The complaint could reasonably be read to allege not only sexual misconduct, but also independent non-sexual bullying that had occurred over time and may have continued during the trip. Because that interpretation was reasonable, the exclusion could not be applied at the pleading stage to eliminate the duty to defend. The Eleventh Circuit therefore concluded that a reasonable reading of the complaint alleged potentially covered non-sexual bullying claims that were not necessarily excluded by the sexual misconduct exclusion.

Accordingly, the two cases above showcase the broad standard that courts use to determine whether an insurer has a duty to defend its insured.

About Benjamin J. Bishay

Ben is an associate attorney in Tressler’s Insurance Services Practice Group in our Orange County, CA office. He focuses his practice on insurance coverage analysis and litigation. Ben worked as a law clerk in Tressler’s Orange County office for over a year and a half as he finished law school and passed the California Bar Exam. During his time at Tressler, he gained experience in several areas of law, including insurance and employment. Prior to joining Tressler, Ben worked as a law clerk for a personal injury firm. Click here to read Ben’s full attorney biography.