The U.S. District Court for the Middle District of Louisiana recently ruled that an insurer may be liable for extra-contractual damages where it engages in an unreasonable delay in satisfying an obligation to pay its policy limits.  Shaw Group, Inc. v. Zurich American Insurance Co., No. 12-257 (M.D. La. Nov. 20, 2014).  The insured, Shaw Group, sought coverage in connection with an underlying action filed in 2009 in which Shaw Group had been sued for property damage that allegedly resulted from defective pipe spools manufactured by Shaw Group.  After tendering the claim to its insurer, Zurich American Insurance Co., a period of 14-months expired before Zurich agreed to defend Shaw Group against the underlying action under a full reservation of rights.  During that time, Shaw Group retained its own defense counsel and paid the full cost of its defense.  The underlying action later settled and Zurich American paid its full policy limits toward that settlement.  Shaw Group initiated a coverage action against Zurich American, asserting that Zurich American breached its duty to defend by failing to promptly pay defense costs, among other claims, and seeking extra-contractual damages.  On cross-motions for summary judgment, the Court held that genuine issues of material fact remained as to the alleged breach of the duty to defend and precluded summary judgment.  As part of its ruling, however, the Court rejected Zurich American’s claim that because it ultimately paid its full policy limits, Shaw Group suffered no damages.  “[T]he Court finds Zurich’s argument—that an insurer could fail to defend for fourteen months and then not be liable for any damages because the insurer paid costs later—illogical.”  The Court noted that the “time value of money” is compensable and sufficient to constitute damages should Shaw ultimately prove its duty to defend case.