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Insurer loses bid to recoup defense costs after abandoning policyholder - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Insurer loses bid to recoup defense costs after abandoning policyholder by Richard Sine Coverage Disputes , P/C Insurers The Hartford Insurance Group Inc. May 4, 2026 A unit of The Hartford lost its bid to recover defense costs from its own policyholder after withdrawing from the policyholder’s defense. In Navigators Specialty Insurance Company v. SVO Building One, LLC , decided Thursday by U.S. District Judge Araceli Martínez-Olguín in the Northern District of California, the court ruled largely in favor of SVO Building One, a Sacramento, California-based data center design firm. Navigators Specialty, a unit of The Hartford based in New York, had issued a commercial general liability policy to SVO and agreed to defend it in an underlying contract dispute with equipment manufacturer Vertiv. The underlying case arose from a 2017 contract in which SVO designed a data center for Vertiv. When Vertiv sued SVO for breach of contract, Navigators agreed to defend SVO while reserving the right to deny coverage later. The policy applied to claims involving disparagement or defamation. When Vertiv dismissed its defamation cause of action in March 2021, Navigators declared it had no further duty to defend and announced it would withdraw from SVO’s defense two weeks later. SVO objected, pointing out that other causes of action in the complaint still contained factual allegations of disparagement. Navigators reversed its withdrawal and continued the defense through settlement. Navigators then sued SVO seeking reimbursement of defense costs. But the judge found that the remaining allegations in the complaint were sufficient to keep the duty to defend alive. The court also excluded Navigators’ expert witness, finding his methodology for calculating reimbursable defense costs failed to meet the standard required under California law. SVO’s breach of contract claim against Navigators survived, as did its claims under California’s unfair competition law. The court referred the parties to a magistrate judge for a settlement conference. 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