As a business owner, you purchase various types of business insurance to try and mitigate your risk and exposure. This lets you focus on growing your business without constantly worrying that one lawsuit will drain your coffers. Therefore, you expect, when sued, that insurance will cover the costs of your lawsuit as well as any final judgement.
When Insurance Does Cover Your Lawsuit
Whether or not your insurance covers your lawsuit will boil down to the contract you have with your insurance company. They’ve probably constructed the language so that they cover a very specific set of issues and, if the case happens to involve issues beyond those in the contract, then they will deny your claim for coverage.
If the claim is squarely within insurance, however, you’ll be assigned a lawyer who works regularly with a particular insurance company. That lawyer is an expert in insurance defense lawsuits and likely an expert in the particular area of law the issue covers. While you are their client, they’ll keep your insurance company apprised of the progress of the case and work with the insurance company to approve any settlement offers made and strategic decisions.
When Insurance Doesn’t Cover Your Lawsuit
If the claim is outside of what insurance covers, or they believe there’s a reasonable argument that it is, then insurance may deny your claim and refuse to cover the lawsuit. In this case, you’re left with the option to pursue the case on your own, hiring a lawyer to handle your defense. Your lawyer can also discuss with the insurance company whether they should be covering the costs of the lawsuit and, in some instances, even take that issue to court.
When You Might Want to Handle Things Differently
An insurance company is a business and, as such, they want to honor their contracts with the most efficacy and the least cost. What that means varies by insurance company. Some choose to fight every lawsuit, knowing that their stronger finances and negotiated rates with attorneys means the fight costs them less and they can simply wear down the other side. Others work to settle a matter as quickly as possible, regardless of the merits of the suit.
What makes the most sense for the insurance company might not be what you as a business owner want. You may be able to open a discussion with your insurance company about how the matter is handled and even get them to cover some or all of the costs of having your handle the matter differently. This discussion occurs on a case by case basis and you have to be able to present a compelling argument about why you case should be handled differently from their normal procedures. Sometimes it even makes sense to hire another attorney experienced in litigation to oversee the attorney hired by the insurance company and make sure that your interests are protected. Having an experienced business litigation team on your side, like the team from Dunn Law Firm, is important if you are facing litigation. We can help you argue and defend a variety of business and civil litigation issues. We’re also experienced at working alongside insurance companies to reach the best possible arrangements for our clients. Reach out to the Dunn Law Firm by calling (435) 628-5405 and set up a free consultation today.