What Can You Expect from Your Liability Insurer?
June, 2005 – Your company receives a Statement of Claim. You are being sued. The allegations could arise from your product, services,
premises (slip and fall) or your duties as a Director or Officer. Whether the claim is groundless, frivolous,
fraudulent, expected or not, you will have begun a journey and your liability insurer will be your road companion.
Understanding the Insurer’s obligations and your own will mitigate the unpleasant pain of litigation and ensure your
corporate goals and profitability are preserved.
Here’s what you should know…
There can be a considerable amount of time from when the occurrence took place, to the commencement of legal action, to final claim resolution. It can take years!
The rights and duties to defend, investigate, negotiate and settle a claim are enshrined in the policy wording.
They can vary.
The Insurer may have a duty to defend and will appoint your legal counsel. Other policies will allow you to appoint your own counsel and indemnify you for your defence costs.
You are required to report a liability claim as soon as practicable including notice of incidences that may give rise to a claim. If your policy is written on a claims made basis, prompt reporting is even more critical as the policy will only respond to a claim while it is in force, not when the occurrence took place.
You are required to cooperate with defence counsel and Insurer.
The Insurer will pay any indemnity to a third party whether it is a court award or out of court settlement. It can also include pre/post judgment interest and any court costs assessed against you.
If the Insurer believes the claim clearly falls outside the scope of coverage, it will issue a Denial of Coverage letter specifically citing applicable policy provisions.
If it is uncertain the Claim will be covered, or if certain Allegations are not covered, the Insurer will proceed with the defence by issuing a Reservation of Rights letter.
The litigation process is quite involved requiring both Insured and Insurer to
work very closely for extended periods of time. A successful partnership and
resolution will always be founded on the principles of utmost good faith between
Insurers Financial Group
The Insurers Financial Group (IFG) was founded on four core values – integrity, respect, innovation and action – and they have served us well. A large part of our success can be attributed to our continuing commitment to client satisfaction. Whether it’s as simple as insuring your home and automobile, or as complicated as specialized business insurance, or estate planning, we have the experience and expertise to customize a program to meet your needs. We’re proud to be building IFG on solid foundations. See for yourself what we have to offer. Check out our web site at http://www.ifgcanada.com