Insurance companies have a duty to defend their insureds when legal action is brought against the insured. However, the actual suit may not be worded in such a manner as to indicate coverage. The court will compare the language of the suit with the language of the policy to see if coverage applies. This comparison of the complaint and the policy is known as the “four corners test.” Courts often broadly interpret the insurance company’s duty to defend and may impose bad faith penalties if the company fails to defend when there is any possibility that the claim is covered by the policy. (See Bad Faith).