Petrogram - Spring 2011 - (Page 19)
You’ve Been Sued and Your Insurance Company Denied the Claim:
Mark Nation, The Nation Law Firm
he only thing worse than being sued is having your insurance company deny the claim, leaving you to deal with the lawsuit on your own. However, there is hope. You have options. Part of the protection you purchased with your insurance policy is known as “liability coverage.” Liability coverage protects you, your employees and your business in the event you are sued for personal injuries, wrongful deaths or damage to property. When you ﬁrst become aware of a potential claim (even if it isn’t an oﬃcial lawsuit) you should immediately advise your insurance company in writing. Don’t wait until you’ve been sued. Most policies require that you notify the insurance company as soon as something happens that may give rise to a claim. That way, the insurance company can investigate the situation and begin gathering important evidence and witness statements, if necessary. Once you notify the insurance company of a claim, it will also analyze the situation to decide whether or not the claim is covered under the policy. If they determine that it is covered, the insurance company will provide you with an adjuster and a lawyer, if necessary. The insurance company will also pay claims up to your liability limit as described in your policy declaration sheet. If the insurance company believes that the claim is not covered by the policy, it will send you either a denial letter or something known as a “Reservation of Rights” letter. With a denial letter, the insurance company ﬂat out denies the claim and says it isn’t going to help you with defense of the claim. In a Reservation of Rights letter, the insurance company may agree to defend you against the claim, but you will have to repay the money spent on a defense lawyer if it is later determined that there is no coverage. In other words, the insurance company is “reserving its rights” to deny the claim later and seek reimbursement from you for the money it spent.
Under no circumstances should you evaluate an insurance denial on your own.
If you receive a denial letter or a Reservation of Rights letter, you need legal representation immediately. Even if you read the letter yourself and believe that the insurance company’s position is correct, you should still have a lawyer who practices in the narrow ﬁeld of insurance coverage evaluate the insurance company’s position. Under no circumstances should you evaluate an insurance denial on your own. Many times, the denial may be appropriate. Even so, you still deserve the peace of mind that comes from knowing that a lawyer experienced in insurance coverage evaluated the denial. You also deserve to know if the denial was wrong and what can be done for you. The legal dockets are full of cases where courts have overturned insurance denials or Reservation of Rights letters. So, how does a lawyer go about reversing a denial? Many times, the way an insurance company reads a particular clause in a policy is quite diﬀerent from how an ordinary person or
Table of Contents for the Digital Edition of Petrogram - Spring 2011
Petrogram - Spring 2011
Meet Your New Executive Director
FPMA Chapter Meetings Are a Success!
FPMA Member Spotlight
You’ve Been Sued and Your Insurance Company Denied the Claim: Now What?
Out & About the Industry
How Health Care Reform Will Aff ect Your Business
Create Competitive Disruption Th rough the “8 Ps”
Index of Advertisers/Advertiser.com
FPMA Featured Advertiser Marketplace
Petrogram - Spring 2011