Which of the following statements about the insurer’s obligation to pr

Which of the following statements about the insurer’s obligation to provide a legal defense under the personal liability coverage (Coverage E) of the homeowners policy is (are) true?

I. The insurer agrees to defend the insured only if the suit is not groundless, false, or fraudulent.
II. The insurer’s obligation to defend the insured ceases after the amount paid for damages from an occurrence equals the policy limit.
A) I only
B) II only
C) both I and II
D) neither I nor II

ANSWER

Answer: B