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Can a defendant be insured for contract breaches?
Insurance policies do not provide any coverage (either defense or indemnity) for contract breaches. Rather, most liability insurance policies provide coverage for personal injury and/or property damage claims. Some insurance policies provide coverage for “professional negligence” and/or “errors and omissions.”
Depending upon the circumstances of the case, the insurance policy involved, and the allegations of the complaint, the allegations of some actions may invoke insurance coverage (defense and/or indemnity) for claims of negligence which also might overlap somewhat with a breach of contract claim.
For example, a lawsuit against a doctor may claim negligence and breach of contract. The negligence claim might invoke coverage under a professional liability policy, and the defense of that claim might provide incidental coverage for the same actions charged as a breach of contract. In that way, there may at times be incidental coverage for breach of contract claims, but it is a rare occurrence.
Almost always, insurance will not cover contract breaches, and will not provide coverage for economic losses caused by a broken promise.
