Whenever you file a wrongful death or personal injury lawsuit, it's generally an insurance company that has to pay if the claim is successful—not the individual defendant. But what happens when an insurer decides, for one reason or another, that it shouldn't have to meet its obligations to insure the defendant? Is that even possible? This is what you should know and how it could affect your case.
Many insurance companies can refuse to cover intentional acts that led to someone's injury or death.
Once in a while, an insurance company will assert that it shouldn't have to insure someone. Usually, it happens when there's some question about whether or not the injury was purposeful—many insurance companies have clauses that exclude them from having to pay for someone's intentional acts of violence.
In other words, if you slipped and fell off your neighbor's front steps because they were uneven and damaged and got hurt, his homeowner's insurance would cover any settlement your receive (up to the limits of the policy). On the other hand, if you fell off the steps because you and your neighbor were arguing and your neighbor reached out and shoved you, the insurance company may have a clause in its contract with the homeowner that protects it from having to pay.
Insurance companies will sometimes fight to be removed from having to indemnify clients.
In other cases, the insurance company's obligation may be a little unclear, which means that it may have to go to court to get the issue of entitlement cleared up.
For example, the insurers of a catering company asked a court to determine if they were able to deny coverage to a caterer who was being sued over the alcohol-related wrongful death of someone that attended a party the caterer hosted. The victim was served alcohol despite being under the legal drinking age. Normally, the insurance company would be required to provide coverage—in this case, however, the judge stated that it isn't liable because the caterer leased the venue from a labor union with its own liquor license and bartenders.
A dispute over insurance coverage can affect your case in several ways.
A dispute over coverage is always going to slow down the lawsuit, which can be difficult to endure. It can also cause other problems.
In the case of the catering company, the judge's ruling essentially tells the victim's attorney that the venue and its insurance company are more appropriate targets for the lawsuit. That could be a problem if the attorney didn't name them as defendants in the original lawsuit. Depending on the circumstances, the attorney may be able to amend the original lawsuit or he or she may have to start all over. In some cases, time limits on filing may have passed, leaving you without the opportunity to collect at all.
For more information on what could happen if an insurance company starts to allege it isn't liable in your case, talk to an attorney today.