The fourth topic in our list of Top Insurance Issues for Non-Insurance Lawyers is coverage for so-called voluntary or independent investigations. In this video, Miller Friel attorney Mark Miller takes a closer look into the reasons why many lawyers incorrectly assume that investigations are not covered, and offers some solutions for companies and counsel seeking to have their insurance carriers pay for these costly investigations.
The starting point for some of the misunderstanding is terminology. Most investigations conducted by corporate entities are not voluntary. An organization may suspect wrongdoing, for example, and, to avoid serious legal repercussions, they begin an internal investigation. Insurance companies would characterize this kind of investigation as voluntary, and likely deny coverage. The investigation, however, is not voluntary; it is conducted as part and parcel with defense of the claim.
Another commonly misunderstood issue is that policy language often strongly supports coverage. Most policies cover the defense of a claim, but some also specifically break out coverage for investigations. Lawyers must carefully review policy language, and never assume that any kind of investigations is not covered.
As with many things relating to insurance, timing is everything. Unless insurance policies are evaluated and understood as soon as defense counsel is hired, both defense counsel and clients face serious risk. Even though notice under claims-made insurance policies presents complex legal issues that may be outside the scope of expertise for a given defense lawyer, it can still get them into serious trouble. See Court Slams Defense Counsel For Not Being D&O Insurance Experts Similarly, it is difficult to determine when notice should be given, and, if you get it wrong, that error can result in the forfeiture of coverage. See Fatal Traps in D&O Insurance Policies Underscored by $10 Million Late Notice Insurance Claim Dismissal
To learn a lot more about this topic watch the video. If your client has commenced an investigation, please give us a call. We will happily review the policies and determine what can and should be done.
To see the whole series, check out Top Ten Insurance Recovery Issues For Non-Insurance Lawyers.
