is no coverage or no potential for coverage, then in most jurisdictions the insurer adequately preserves its defenses to coverage by sending a letter to the insured explaining its position and declining to provide a defense. But this option can be very risky, because if a court later determines that there was a duty to defend all along, then it will hold that the insurer necessarily breached that duty, and may also hold that the insurer is subject to tort liability for bad faith. So insurers will often defend under a reservation of rights rather than decline coverage altogether. Outside of the United States and Canada, liability insurers generally do not assume a duty to defend, in the sense of assuming a direct responsibility for hiring and paying a lawyer to defend the insured. Many write policies which promise to reimburse the insured for reasonable defense costs incurred with the insurer's consent, but this is essentially a form of indemnification (covered in the next section below), under which the insured remains primarily responsible for hiring a lawyer to defend themselves. Such insurers often expressly reserve a right to defend the insured, presumably so they can intervene to protect their own interests if the insured's counsel of choice is not providing an adequate defense against the underlying claim. To indemnify An indemnity case arises when an individual is obliged to pay for the loss or damage incurred by another person in an event of an accident, collision etc. The duty of indemnity generally originates from the agreement in between insurer and insured which protects the insured against any liability, damage or loss. The duty to indemnify is the insurer's duty to pay all covered sums for which the insured is held liable, up to the limits of coverage and subject to any deductibles, retained limits, self-insured retention, excess payments, or any other amounts of money which the insured is required to pay out-of-pocket as a precondition to the insurer's duty. It is generally triggered when a final judgement is entered against the insured, and it is satisfied when the insurer pays such covered amounts to the plaintiff who obtained the judgement. Most policies provide for payment of monetary damages as well as any costs, expenses, and attorney's fees which the plaintiff may also be entitled to as the prevailing party. Unlike the duty to defend, the duty to indemnify extends only