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Case Law Update: Insurance Companies Duty to Driver of Vehicle Not Insured by Company

Economy Fire & Casualty Company v. Brumfield, No 4-07-0658 (8/13/08) held that the insurance company did not breach its duty to defend driver of vehicle, whom it originally claimed did not have permission of vehicle owner, to drive it; because it filed declaratory judgment action when original complaint against defendant was filed. When amended complaint was filed, naming vehicle owner as defendant on theory of negligent entrustment, conflict of interest arose between insurer and defendant, driver; and insurer’s duty was limited to reimbursement of defense costs. Therefore, driver has not proved breach of insurer’s duty to defend. This professional malpractice suit was affirmed by the court.