An insurance company has a duty to defend an insured when the insured is exposed to potential liability to pay based on the facts known at the outset of the case, no matter how unlikely it is that the insured will be found liable or whether the insured is ultimately found liable. The Renco Group., Inc. v. Certain Underwriters at Lloyd’s, London, 362 S.W.3d 472, 479 (Mo. App. E.D. 2012). “To extricate itself from a duty to defend the insured, the insurance company must prove that there is no possibility of coverage.” Marshall’s U.S. Auto Supply v. Maryland Cas. Co., 189 S.W.2d 529, 530 (Mo. 1945).
If the insurer refuses to defend on the ground that the claim against the insured is outside the coverage of the policy, the refusal will be justified if the claim actually is outside the policy coverage, and the insurer then is not guilty of any breach of contract and incurs no legal obligation. Marshall’s U.S. Auto Supply v. Maryland Cas. Co., 189 S.W.2d 529, 530 (Mo. 1945). However, if the claim is within the policy coverage and thus within the duty of the insurer to defend, refusal of the insurer to do so is unjustified and the insurer is guilty of breach of contract.