By Mark D. Mese

You purchased insurance thinking that if you are sued or subject to a demand for money or damages your insurance company will defend and indemnify you.  Unfortunately, insurers deny many insureds requests for defense and indemnity.  Consider the following actions if your insurer denies your request for defense and indemnity.

  1. If you have been served with a lawsuit, make sure that you retain a lawyer to defend the lawsuit.  There is generally a very short time period between when you are served with a lawsuit and when a response is due.  Failure to have a lawyer handle the lawsuit could lead to a quick judgment against you.
  2. Discuss the denial of coverage with your insurance broker or agent.  The agent may be able to assist you in getting the insurer to reconsider its denial of coverage.
  3. If your agent is unsuccessful in rescinding the insurer’s denial of coverage, you should consider consulting with an attorney that specializes in insurance coverage and recovery for policy holders.
  4. The insurance coverage attorney will usually be able to review your insurance policy and the written demand or the lawsuit filed against you and provide an initial estimate of your chances of obtaining a defense and/or indemnity from your insurer.  The amount of time and cost for an initial estimate will vary depending on the complexity of the claim and your policy(s).
  5. If you engage an insurance coverage attorney to assist in your demand for defense and indemnity, you have several strategic options to consider.
  6. a)  The coverage attorney can stay behind the scenes and work with your agent to continue negotiations with your insurer.
    b)  The coverage attorney can negotiate directly with your insurer.
    c)  File suit against the insurer in either the pending lawsuit against you or in a separate action.

  7. The decision on what to do and when, if your insurance company denies coverage can be complex.  When and where to file a lawsuit for insurance coverage against your insurance company often requires consideration of a significant number of complex variables.  To the extent the insurance coverage and lawsuit involves significant sums of money, hiring a policy holder insurance coverage attorney should be strongly considered.  Insurance companies have insurance coverage specialists representing them who have specific knowledge.  To the extent possible you want to be on an even playing field.