Why Accident Victims Need to Know About the Insurance Company’s Duty to Defend
As you know, insurance coverage plays a large role in personal injury cases. One of those roles isn’t just paying injured victims on behalf of the insurance company’s insured client, but also, providing an attorney, free of cost, to their insured.
That’s a major reason to have liability insurance–not just to compensate victims that might be injured, but also, to provide you with an attorney in the event that you are sued.
Denying the Loss is Covered
But often, insurance denies that they have any obligation to insure their insured client (the person or entity that you are suing for compensation for your injuries). That often happens because of exclusions–items in an insurance policy that are specifically excluded from coverage.
If the insurance company doesn’t provide coverage for a loss, then they also would have no obligation to provide an attorney to represent their insured, being sued for an accident that, according to them, isn’t covered under the policy anyway.
Reservation of Rights
Sometimes, the insurance will still provide an attorney to represent their client or insured in court, under what is known as a reservation of rights. A reservation of rights says “we don’t think we cover or insure this loss, but in case we do, we are providing an attorney for our insured anyway.”
Legally, so long as the complaint against the insured party states a claim that would be covered by the policy, the insurance company must provide an attorney to their insured–that’s called the duty to defend.
While the injury case is going on, under the reservation of rights, the insurance company is doing two things that are seemingly opposite: representing their insured against you, the victim, as if there is insurance coverage, but also (often in a separate lawsuit), fighting against their own insured, arguing that the loss or damages are not covered damages under the insurance policy.
What About Actually Paying?
Even if the injury victim wins in court, that doesn’t mean that the insurer for the Defendant has to pay–if they continue to feel that the loss is not covered under the policy, they can wait to pay until there is a determination in court that there is insurance coverage for the loss.
In other words–just because the insurance company hires a lawyer and defends the insured doesn’t mean that any judgment or settlement that is reached will be paid.
Why This Matters to Victims
You may wonder why you should care about any of this, if you are the injured party suing–it’s the Defendant that needs its insurance company to defend and pay, not you, right?
Well, in practice, an insurance company that covers a loss means that if you do win or settle your case, you can be pretty certain that you will be paid. Without it, you may be left to chase people or businesses without assets, to collect on your judgement or settlement.
Questions about the role of insurance in your case? Schedule a consultation with our Tampa personal injury lawyers at Barbas, Nunez, Sanders, Butler & Hovsepian today to discuss it after your accident or injury.
