If liability is not covered, what is the insurer's obligation regarding defense costs?

In situations where liability is not covered under an insurance policy, the insurer has no obligation to provide defense costs. This means that if a claim falls outside the scope of coverage, the insurer is released from any responsibility to defend the insured in legal matters related to that claim.

The principle behind this is that insurance contracts are based on the expectation that insurers will provide defense for claims that are covered by the policy. If a claim does not fall within the defined coverage, the insurer is not obligated to step in and bear the costs associated with legal defense. This approach helps insurers manage their risk and maintain the financial viability of their operations.

The other choices present scenarios where either the insurer would still be liable for costs, or the insured would have an obligation to settle, which do not align with the general principles of liability coverage in insurance agreements. Thus, when liability is clearly not covered, the insurer's duty to provide defense costs does not exist, confirming that the correct understanding is that the insurer is not required to provide defense.