The duty to defend is the obligation of an insurer to pay for the legal costs of one of their insureds when that insured has legal action brought against them. This duty is broader than the insurer's duty to indemnify. The insurer must defend not only when it would have to pay out damages under the insurance policy, but must also defend where there is any chance whatsoever that the policy would pay out.

For example, if someone who has an auto insurance policy covering lawsuits up to $50,000 gets sued for $1 million, the insurance company is still required to defend the insured against the entire amount of the claim, even if it is arguable that the insured is not covered in the circumstances (such as when an unlicensed driver was driving the vehicle).