If I am sued, does my insurance company defend me in court?

When you buy liability insurance, part of the insurance company’s obligation is to provide a defense for you if you are sued. The insurance company will do this by hiring and paying for an experienced attorney to represent you in court. Even though the insurance company selects the lawyer and must approve the payment of all legal fees and other expenses of the lawsuit, the lawyer represents you. In some cases your insurer may send you a reservation of rights letter. This is because your insurer is required to defend you on any claim that could be covered. If the lawsuit against you involves some claims that might be covered and others that are not covered, the insurer will have to offer you a defense. If the verdict in the case indicates that you were liable on a claim that is not covered, the insurance company will not pay the claim, even though they paid for the lawyer. The appointed lawyer is not required to represent you in any counterclaims that you might have against other parties. If you find yourself in this sort of situation, you should consult your own attorney about what steps you can take to make sure that your interests are protected.

Case Studies: Liability Insurance and Defense in Court

Case Study 1: The Reservation of Rights Letter

Sarah is a small business owner who carries liability insurance for her company. One day, she receives a lawsuit from a customer who claims to have suffered injuries due to a defective product. Sarah notifies her insurance company, and they assign an attorney to represent her in court. However, along with the appointment, Sarah also receives a reservation of rights letter from the insurer.

As the case progresses, Sarah’s attorney diligently defends her against the customer’s claims. However, during the trial, it is revealed that the damages caused by the defective product fall under an exclusion in Sarah’s insurance policy. Despite the insurer covering the legal fees and expenses, Sarah becomes responsible for the damages awarded to the customer.

Case Study 2: Counterclaims and Individual Representation

John is a homeowner who faces a lawsuit from his neighbor, alleging property damage resulting from John’s negligence. John’s liability insurance policy provides coverage for such claims, and his insurance company appoints an attorney to represent him in court. However, John believes that his neighbor shares some responsibility for the damages and wants to file a counterclaim.

To ensure his interests are protected, John consults his personal attorney, who advises him on the counterclaim and represents him separately. While the attorney appointed by the insurance company focuses on defending John against the neighbor’s claim, John’s personal attorney handles the counterclaim against the neighbor.

Throughout the litigation process, both attorneys work together to build a robust defense strategy for John. The insurance company covers the legal fees for the attorney representing John against the neighbor’s claim, while John is responsible for the legal fees associated with his personal attorney and any awarded damages from his counterclaim.

Case Study 3: Coverage Determination and Adequate Representation

Lisa, a driver, is involved in a car accident where she is at fault. The other party involved files a lawsuit against Lisa, seeking compensation for injuries and property damage. Lisa’s auto insurance policy includes liability coverage, and her insurance company assigns an attorney to defend her in court.

During the proceedings, it becomes apparent that the accident falls within the scope of Lisa’s insurance coverage. The attorney appointed by the insurance company diligently represents Lisa’s interests and works towards a favorable outcome. The insurance company covers all legal fees and expenses associated with the defense.