What is the Insurance Duty to Defend in Utah?

Rock climbing the world-famous cobblestone cliffs of Maple Canyon near Fountain Green, Utah

The duty to defend is the duty that an insurance company owes its insureds to hire an attorney and take action to defend the insured when the insured gets sued. It’s a bit of complex law that is often at the heart of any bad faith action against an insurance company. Utah typically follows the majority of jurisdictions when it comes to the duty to defend in insurance contracts. Here’s what you need to know:

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Utah Hospitals Now Get Paid 100% of Their Liens in Personal Injury Cases

Who gets how much from a personal injury settlement or judgment has always been shared pro rata among those benefitting: the plaintiff and those who paid for the personal injury. No longer. The Utah Supreme Court ruled in Bryner v. Cardon Outreach, LLC, et al., 2018 UT 52, that the Utah Hospital Lien Statute, Utah Code § 38-7-1, et seq. allows hospitals 100% of their lien regardless of the cost involved in obtaining the recovery. The statute is relatively straight-forward but its effect is a bit murky. Let’s look at the effects.

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The Open and Obvious Hazard Defense to Premises Liability Claims in Utah



In Utah, claims against landowners, i.e., ‘premises liability’ claims, are subject to the ‘open and obvious hazard‘ defense. This defense is the assertion that the injured person failed to protect themselves from a risk that should have been apparent to them. Businesses and landowners who may have customers, clients, or patrons visit their property should beware, however, that this defense is not absolute and should take reasonable precautions.

Utah’s Open and Obvious Rule

The Utah Supreme Court clarified the open and obvious defense in Hale v. Beckstead, 2005 UT 24. The Hale court cited the Second Restatement of Torts Sections 343 and 343A as the source of Utah’s defense and not ‘common law’– prior Utah judge-made law. The Restatement states the responsibilities of both a landowner and a person who is present on the land. I will restrict this post to the those present on the land legally either by express or implied invitation, known as ‘invitees.’ Duties owed to trespassers and others is a subject for another day.

The Restatement version of the open and obvious danger rule also does not act as a complete bar to the recovery of a plaintiff injured as a result of another’s negligence. Hale ¶23.

Utah law, relying on the Restatement, sets up a number of situations that defeat an open and obvious danger defense. Each is based on the general proposition that a landowner owes a duty to “protect invitees against dangers of which [the invitee] are unaware, may forget, or may reasonably encounter despite the obviousness of the danger.” Hale at ¶27. A landowner is potential liable to an invitee if the landowner:

  1. knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and
  2. should expect that an invitee will not discover or realize the danger, or will fail to protect themselves against it, and
  3. fails to exercise reasonable care to protect an invitee against the danger.

In essence, if a landowner “should expect that [an invitee] will . . . fail to protect [himself] against [a dangerous condition],” the landowner must exercise reasonable care to protect him.

A typical situation might be a balcony without a railing. The danger, although obvious, involves an unreasonable risk of harm and could be encountered by children who may not recognize the danger or fail to protect themselves.

Just because a dangerous condition on your property is ‘open and obvious’ does not end the analysis. Landowners whose property is open to the public or to any invitee must exercise reasonable care. If you have any question about what you are required to do, ask your attorney or insurer.

Apportionment of Fault

The Hale court made it clear that the open and obvious defense fits nicely into Utah’s comparative fault scheme. The defense formerly was a complete bar to an invitee’s claim against a landowner. Under Utah’s prior scheme, “a person who bore any portion of fault, no matter how slight, for his own injuries was barred from recovering against the primary tortfeasor.” Hale at ¶19. No longer. Long ago (1973!) Utah adopted comparative fault. This means that the fault of each party is compared and percentages of fault assigned. The defense simply establishes a higher bar for an injured invitee before the invitee can establish liability and get cash. Still, an injured invitee’s fault must be less than the fault apportioned to the landowner in order to prevail at all. (If you are curious and want to drill down on this issue, see U.C.A. § 78-27-38, et seq.).

The Hale court made it clear that if there is no duty to warn an invitee of a danger then the comparison of fault never takes place. An invitee must first prove a duty existed and then prove that the landowner failed to meet that duty before any comparison of fault is ever performed.

Hale also made it clear that landowners are free to maintain an obvious danger on their property. The duty inform or protect arises when invitees are present:

This duty does not require that landowners fully remedy potentially unsafe conditions, only that landowners adequately warn invitees about such dangers. Where the danger is so obvious such that no warning is necessary to alert an invitee, the possessor of land is not required to give the warning anyway unless other circumstances, discussed above, warrant. Hale at ¶30.


If you own property, you are responsible to either keep it free of unsafe conditions or warn anyone coming onto your land of the unsafe condition. The Hale court defined in simple terms the requirements and how a landowner’s duties are applied and the hurdles an invitee must overcome when injured by an open and obvious condition on land.

An example comes to mind. Just the other day, my son had a friend over to play. We had built a platform on a hillside that was supposed to be the floor of a playhouse. Well, the playhouse was never built and the platform has been through at least two winters and is getting ‘weathered.’ I suspected but never confirmed that the boards had rotted and were unstable. My son’s friend confirmed my suspicion and fell through the boards and down the hill. Fortunately he was not hurt and considers his scratches a badge of honor and proof of a great story. (The platform you must understand is on a very steep hillside and the fall was substantial for a 10 year-old).

If my son’s friend had been injured, I would likely face liability for failing to ‘exercise reasonable care to discover’ the dangerous condition and either prevent the injury or warn of the dangerous condition. I do not recommend following my example. Be careful out there!

If you have questions, you should ask them- contact me, Utah attorney Ken Reich. I regularly represent companies and the individuals and families that own them. My job is to know and understand my clients and their goals. Together with the right legal experts, I can help you get the result you want.

Does Your Business Need Insurance? Tips from a Utah lawyer

20160119_103832Insurance covers whatever has a value. I do not sell insurance but I am a consumer of it: in business, at home, and as a source of income. It is a monster topic with many issues. Let me share some bits that you may not have considered.

Why should your startup or new business consider insurance? If this question is a revelation to you, here’s the gist: the more you have to lose, the more diverse insurance products you should consider.

What does insurance do for you? It protects against loss. If you have nothing to lose personally or in business, then I suspect you may be running thin on insurance and keeping only the state-required minimums. (Hopefully you are not going without). If this is where you are, keep the following in mind: legal costs and interruption of your business.

If you or your business is sued on a covered claim and you have insurance, your policy will pay for a legal defense. In business disputes, legal fees mount very quickly. Quite. Legal fees can quickly be the tail that wags the dog.

Insurance allows you to continue to focus on your core business and less on the lawsuit threatening it. Insurance covers both the ultimate liability and the cost to defend the claim.

As an attorney, I consider it my duty to assume the burden of my client’s lawsuit so my client can focus his/her attention on business.

Consider this: A solo startup that is well-protected in its business organization (i.e., LLC or Inc.) could potentially risk running short on insurance when there is little to lose. As the business fills out, however, and assets are obtained (such as equipment, real property, intellectual property, copyright, patents, trademarks, etc.), or employees are hired, so should the insurance. Insurance is a hedge against unknown losses.

Some basic insurance individuals cannot go without include:

  • Auto insurance. If you own a car, it’s required by law.

The minimum amount of Utah auto insurance coverage is $25,000/$65,000/$15,000. This means limits for bodily injury are $25,000 per person, with a total maximum of $65,000 per incident, and up to $15,000 for damage to another person’s property.

  • Property insurance: If you own a home or any real property, it is presumably an asset that you do not want to lose. There is no sense owning property if you do not protect it from loss.

Some basic insurance a Utah business should consider:

  • Auto. If your business owns a vehicle, it must insure it. If employees are required to use a car for business purposes, the business must provide insurance. Typical personal policies do not cover the business use of vehicles. Talk to your insurance agent if your business requires the use of a vehicle.
  • General Liability. Every business is different and you should evaluate your risk. General liability insurance typically covers libel, slander, property damage to others, and personal injury to others.
  • Business Property Insurance. This includes both real property insurance for property you own as well as renter’s insurance. Think of it as homeowner’s insurance for commercial property. It will protect your products (widgets or whatever you manufacture or inventory) and your assets (equipment, furnishings, etc.) from fire, flood, or whatever your policy covers.
  • Worker’s Compensation. If you have one or more employees in Utah, you will definitely want to read the Utah Labor Commission’s Employer’s Guide. A good start from the Guide: “Businesses with no employees may not be required to carry workers’ compensation coverage. For example, sole proprietorships, partnerships and limited liability companies in which the owners perform all the work and have no employees and may not be required to have workers’ compensation coverage. Refer to Utah statute 34A-2-104.”
  • Professional Liability. Some professions (doctors!) are required under Utah state law to carry malpractice insurance. If not required, you really (really) should have it. It is your livelihood at risk.

Here’s the list of optional insurance you may want to consider:

  • Umbrella.  This is excess insurance. Typically if your underlying policy (auto, homeowners, general) covers a claim but the claim exceeds the coverage limit, the umbrella kicks in to cover the loss up to its limit on the claim. Note: policies vary; it is up to you to read the fine print or have your agent explain it to you. I personally have an umbrella policy. It gives me a cushion if my teenager happens to cause a catastrophic accident that my basic auto insurance may fail to cover. It usually comes in increments of one million with the lowest available being $1m.
  • Health and Life. Goes without saying. These topics are too big to address here.
  • Data Breach. If you obtain or collect private, sensitive, or financial information from your clients, you are at risk of having it stolen by a hacker or virus. Data breach insurance covers this risk.
  • Business Interruption. This is often a sub-set of a property policy. It covers your business operations and earnings in the event of a covered event (fire, flood, etc.).
  • Employment Practices Liability Insurance. When you have employees, this insurance covers your management of them.  It covers wrongful acts arising from the employment process. The most frequent claims include wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct such as employment-related defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds.
  • Directors and Officers. This insurance covers claims made against officers and directors for acts in the course and scope of their employment. You can get D&O insurance to cover nearly any business enterprise. It will cover claims arising from managerial decisions that have adverse financial consequences.
  • Errors and Omissions. This is more of a subset of a policy rather than the policy itself. E&O insurance protects you against liability for committing an error or omission in performance of a professional duty. It will cover financial rather than bodily injury or property damage.
  • Miscellaneous. Depending on your business or profession, there may be specialized or niche insurance to cover you.  Some examples include commercial general liability (CGL) policies (often for construction businesses), lender-placed and REO insurance for financial institutions, event insurance, terrorism insurance, and travel insurance.

Insurance is very broad topic but one that you really need to look at closely for yourself and your business. If you have questions, you should ask them. There are many insurance agents, brokers, and options. I can provide some local references if you would like. If you would like more information about insurance and its intersection with the law and how it affects your business, contact me, Utah attorney Ken Reich. I regularly represent companies and the individuals and families that own them. My job is to know and understand my clients and their goals. Together with the right legal and insurance experts, I can help you get the result you want.