What is an insurance defense lawyer?

slip and fall attorney

What is an insurance defense lawyer? Insurance companies sell insurance policies such as automobile insurance, medical malpractice insurance, commercial property insurance, and homeowner insurance through licensed insurance brokers. Insurance companies also employ licensed claims adjusters to handle claims made under these policies. Insurance companies hire attorneys to provide legal representation to policyholders.  Under Washington law, an attorney hired by an insurance company represents the insured policyholder and not the insurance company.  Before looking at some of the activities an insurance defense attorney typically does, it is worthwhile to briefly discuss the claims handling process.

Overview of Claims Handling Process

When your insurance company receives a claim, it is not necessarily accepted at face value.  As part of the claims handling process, the claims adjuster will review the language in the policy.  If your claim is excluded by the plain meaning of the language used in the policy, the claim will typically be denied.  If, on the other hand, the claim is covered under the policy, the adjuster will evaluate the claim to ensure it is legitimate.  

If an adjuster suspects a claim is illegitimate or fraudulent, the claim will likely be litigated, or if an insured policyholder has already been sued, the adjuster will hire an outside insurance defense lawyer to represent its insured.  The insured is the person covered by insurance policy.  The word “person” includes small and large businesses and ordinary people.  Some examples can help clarify when insurance companies will employ attorneys to represent their insureds.  

Example 1: ABC, Inc.  owns a restaurant.  It bought commercial liability insurance from XYZ, Inc.  A customer slips and falls in the restaurant.  ABC contacts XYZ to report the incident. XYZ suspects the customer will file a lawsuit against the restaurant.  If a slip and fall on the restaurant is covered under the policy, then a claims adjuster will hire an attorney to represent ABC. 

Example 2: ABC, Inc. is a plumbing company.  Its plumbers drive company-owned vans. ABC, Inc. bought a commercial auto policy from XYZ, Inc. While driving a company vehicle, an employee crashes into another vehicle, causing injuries to the other driver.  The other driver sues ABC, and ABC reports the litigation to XYZ, which then hires an attorney to defend ABC and its employee in the litigation. 

The Role of an Insurance Defense Attorney

As the two examples above show, an insurance defense attorney is used when the insurance company’s insured client might be sued or has been sued so long as the event is covered by the language in the insurance policy agreement. 

It is important to note that insurance law encompasses many types of issues having to do with insurance policies and claims. Insurance defense attorneys, however, are typically involved with only three categories of responsibilities: making sure policyholders are protected if sued, helping people determine when insurance must pay a claim, and ensuring that insurance companies are compliant with applicable regulations.  Protecting policyholders in litigation is by far the most common responsibility insurance defense lawyers perform.  Protection of insureds starts with a simple phone call or meeting.  Insurance defense attorneys typically ask the insured for all documentation relevant to the litigation.  The insurance defense attorney will represent the insured through litigation, including trial. 

Insurance law encompasses many different industries, occupations, and claims. Insurance defense attorneys can be hired to represent insurers and their policyholders in all types of claims, including: 

  • Automobile third party liability
  • Uninsured and underinsured driver claims
  • Property and homeowners claims
  • Premises liability
  • Professional liability  
  • Employment Law
  • Construction
  • Municipal Law
  • Insurance coverage disputes
  • Bad faith

When insurers hire competent insurance defense lawyers, the partnership can protect insurance companies from paying too much on claims and avoid paying illegitimate claims.  This prevents insurance premiums from rising for everyone.

Can you choose which attorney the insurance company hires? 

The insured typically does not get a say in which attorney or law firm the insurance company hires to represent the insured.  The insurance contract will state whether the insured can choose or recommend a law firm or attorney.  If, however, you are sued and have a policy of insurance in effect, you can contact the assigned claims adjuster and request a specific law firm or attorney.  However, most insurance companies will choose from a list of approved local law firms or attorneys who will represent you because these firms or attorneys have a proven track record of success.

Working with Policyholders

Insurance defense attorneys work closely with policyholders throughout the litigation process, a process that can take years to complete.  Policyholders often ask if they will be responsible for the cost of defense. Most insurance agreements require the insurer, not the policyholder, to pay all defense costs.  This is not to say that the policyholder is never responsible for defense costs.  Policyholders are contractually required to cooperate with the insurance company and insurance defense counsel in the litigation process.  If a policyholder is not cooperative, the insurance company can deny coverage.  This would force the insured to be responsible for all defense costs and any settlement or jury verdict. 

Insurance companies will not only pay the costs of defense, but they will also pay any settlement or jury verdict up to the policy limits.  So, for example, if ABC, Inc.’s policy with XYZ, Inc. is for $1,000,000, XYZ will pay for the costs of defense and a settlement or verdict up to $1,000,000. The insured may be responsible for any amount over $1,000,000.  A competent insurance defense attorney will advise the policyholder and insurance company of the potential for a verdict over policy payments. This protects both the insured client and the insurance company. 

Working with Insurance Companies

Everyone needs insurance, both people and businesses. Without insurance, people and businesses would not be able to pay the rising cost to replace or restore items lost, damaged, or destroyed by events sometimes beyond our control.  Some losses are caused by the negligence of third parties, some losses are caused by our own negligence, and still other losses are caused by no fault of anyone.

Nearly everyone knows someone who has been in a motor vehicle accident or has themselves been in a motor vehicle accident and submitted a claim to their own insurance company or a third party’s insurance company. If you submit a claim to all the insurance companies, the insurance company has a legal duty to work with you, and you have a contractual duty to work with the insurance company until the claim is fully resolved.  There are no such duties when you make a claim against a third party’s insurance.  An example may be helpful.

“A” is riding as a passenger in “B’s” vehicle when they are struck by another vehicle driven by “C,” who was not carrying required liability insurance.  In that situation, “A” could make a claim under her own UM/UIM policy or under “B’s” UM/UIM policy.  Since “B” is a third party, his insurance carrier would not have the same legal obligations to “A” as it would if “B” had filed a claim under his own policy.  As this example hopefully illustrates, insurance law can be confusing and complex. For this reason, it is important to contact your insurance company promptly after suffering any type of loss, whether property damage, personal injuries, business losses, etc. 

Get the Help You Need in the Tri-Cities at Aultman Law

 Aultman Law has nearly 18 years of experience handling insurance defense cases, including construction defect liability, premises liability, automobile liability, professional negligence, and breach of contract matters. Aultman Law has worked with some of the largest insurers and their clients. As my client, you are kept informed about the status of your case at every step until the case is successfully resolved because, after all, it’s your case.

My law firm’s practice areas are personal injury law, business law, construction law, and insurance law

At Aultman Law, experience is the difference. Among the advantages, you enjoy when you let me represent you are an excellent track record, unparalleled customer service, and transparent fees. If you would like more information or want to schedule a free consultation, I invite you to call me today at 509.282.2456 or complete our Online Contact Form.

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