Common use of Defence Costs Clause in Contracts

Defence Costs. For any claim the subject of indemnity under this policy the insurer agrees to pay on behalf of the insured for defence costs incurred with the written consent of the insurer provided that nothing in this clause 2.1.3 increases the limit of indemnity. Notwithstanding clause 2.1.3, if the limit of indemnity in the schedule is stated to be exclusive of defence costs, the insurer will pay defence costs in addition to the limit of indemnity, provided that if the limit of indemnity is exhausted by the payment or settlement of any claim the insurer’s liability to pay defence costs in respect of that claim shall be limited to such proportion of those defence costs as the limit of indemnity available for payment or settlement of that claim bears to the total payment (including where applicable claimants' costs) required to dispose of that claim.