Most lawyers assume that criminal conduct is not covered by insurance. As a general rule, this assumption is incorrect.
This mistaken belief likely comes from two different misapplied insurance concepts. First, some cases hold that it is against public policy to permit a thief to recover insurance proceeds for his crime. Many lawyers, as a result, have come to the understanding that it is against public policy to insure criminal activity. Were this public policy exception to coverage exists, however, it is quite narrow. For example, there is no public policy against an accused having the right to counsel. In fact, the exact opposite is true. Under our justice system, the criminally accused have a constitutional right to counsel. Accordingly, public policy favors insurance coverage for criminal defense. Accordingly, most insurance policies specifically provide defense coverage for criminal proceedings.
Second, many kinds of insurance policies contain criminal or fraudulent misconduct exclusions and many lawyers assume that these exclusions must exclude criminal activities. As a general rule, however, these exclusions do not apply to the defense of criminal activities. Often times the exact opposite is true. Most policies expressly provide coverage for criminal defense up to the point of final adjudication.
Please watch the video to learn more. Although there are complexities on this coverage issue, the starting point for analysis is that insurance coverage must be evaluated the moment that any kind of criminal charges are brought against a client. If you have any questions about how particular insurance policies deal with this issue, please give us a call. We are happy to help.
To see the whole series, check out Top Ten Insurance Recovery Issues For Non-Insurance Lawyers.