Insurance Carrier Consent for Settling Claims and Incurring Defense Costs
The Coverage Trap: Lack of Consent
Today, managing partner Brian Friel continues his series: The Ten Biggest Mistakes Made By Corporate Insurance Policyholders, addressing various consent and duty to cooperate issues that can arise with insurance claims. The coverage trap here is that policyholders may not tell their insurance carriers that they have hired outside counsel to defend the underlying lawsuit or that they have reached a settlement with the underlying plaintiff. This is a situation where the policy clearly covers the claim, but because of a policyholder’s failure to keep its insurer apprised of litigation developments, an insurer may refuse to pay some or all of the defense costs or settlement.
Tips on Maximizing Coverage
What we have seen over the years is that some companies and some defense counsel are not focusing enough on insurance, even in situations where notice is timely submitted and the insurance carriers have accepted coverage. Forgetting to inform your insurer of defense counsel invoices or an upcoming settlement meeting is like the functional equivalent of fumbling the football at the 5 yard line. You can still make a touchdown, but your claim is more difficult to make than it needs to be. In today’s video, Brian discusses how to avoid unforced errors. Watch the video to learn more.