Notifying an Insurance Company of a Lawsuit
Being served with litigation papers can be a nerve-wracking experience. Defendants to a lawsuit may be wondering how much they need to pay out of pocket to deal with legal costs, and what the next steps may be during the litigation process. Luckily, many individuals and companies may be covered by insurance, and if this is the case, insurance companies will generally pay an insured’s legal bills and the cost of any recovery. However, notifying an insurance company of a lawsuit can be a difficult process in some situations, especially if insureds do not keep comprehensive records of their insurance coverage.
Researching Insurance Coverage
Before notifying an insurance company of a lawsuit, an insured needs to determine which insurance company covered them for the incident involved in a lawsuit, normally called the “date of loss.” This is especially important if an insured has different insurance companies for different periods of time, which is common for a number of parties. Usually, insureds will be issued certificates of insurance that show which insurance company covers the insureds for a given policy period. If a party has lost such insurance documentation, and they used a broker to procure insurance, they might be able to ask their broker for information related to their insurance coverage. If a company knows they had insurance coverage for some amount of time at one insurance company, they may also be able to reach out directly to representatives of that company about whether they have insurance coverage for specific date of loss.
File a Claim
The next part in the process of notifying an insurance company of a lawsuit is filing a claim. A claim basically tells the insurance company that liability is alleged against the insured, and if litigation has already been filed, papers related to a lawsuit may accompany claims paperwork. If a company procured insurance through a broker, that broker will usually help an insured complete the necessary paperwork. However, if an insured procured insurance without a broker, the insured itself usually needs to file the claims paperwork. Most insurance companies allow insureds to complete claims paperwork online, and insureds can usually go to the websites of their insurance companies to fill out the needed forms. If an insured has a good relationship with an attorney, it often pays to have the lawyer help fill out the claims form to ensure that the claim is properly processes by the insurance company.
Follow Up from Insurer
The next part of notifying an insurance company of a lawsuit is providing additional information to an insurance company separate and apart from details included in a claims form. After a claim has been submitted, an insurance company usually assigns a claims adjuster or some other professional to handle the file. That person may need additional information from the insured in order to properly process the claim. For instance, this person may request surveillance footage, incident reports, photographs, or other evidence concerning the incident that forms the basis of the claim. This information allows the claims adjuster to determine if the incident is covered by the insurance, how much liability an insured may have, and other issues. Again, it often pays to engage your own counsel during this part of notifying an insurance company of a lawsuit in order to help ensure that a claim will be accepted by an insurer.
Correspondence from the Insurer
After notifying an insurance company of a lawsuit, the insurer usually sends a letter about the status of the claim. In the best-case situation, the insurance company will accept coverage of the claim. Under this scenario, the insurer will find that the date of loss occurred within the insurance policy period, and that the incident is included in an insurance policy’s coverage. An insurer will then usually inform the insured that they have assigned an attorney to assume the defense of the claim and provide information about this counsel.
However, in certain instances, insurance companies do not assume coverage of claim. Sometimes, the insurance company finds that the incident did not really occur during the insurance policy period. At other times, an insurance company may find that the incident at issue is part of an exclusion to coverage or is otherwise not covered by a policy. At this point, an insurance company may decide not to assume coverage, or may assume coverage with a reservation of rights. If an insurance company reserves its right to disclaim coverage, it may sue an insured to have a court determine whether the insurance company needs to cover an insured.
Litigation with an Insurance Company
After notifying an insurance company of a lawsuit, an insured may face litigation over whether an insurance company has the responsibility to assume coverage. Such lawsuits often deal with wording of policies and insurance contracts, which impact whether an insurance company has the duty to defend an insured. However, insurance companies may sue to disclaim coverage if an insured made misrepresentations on insurance applications or did not assist in the investigation of a claim. As a result, it is important to be truthful on insurance paperwork and cooperate in the defense of a claim.
The Rothman Law Firm is experienced with insurance law matters, and we have represented insureds in cases covered by insurance and have also dealt with litigation involving whether an insurance company has a duty to defend an insured. If you are looking for an experienced insurance defense and insurance law lawyer, please feel free to contact The Rothman Law Firm to request a free legal consultation.