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An insurer’s failure to defend: stark concern for any policyholder

Fri Jun 5th, 2015 on     Insurance Claims,    

Although insurance-related considerations and needs are of course quite different in many respects for homes and businesses, respectively, they certainly do coalesce in one very important way, namely this: Regardless of the nature of a property, its owners need to protect against third-party liability in instances where it is alleged that some danger or defect resulted in personal injury.

That sobering possibility is always looming, exposing a property owner to outsized risks in the event that insurance lacks to indemnify against demonstrated harm.

Prudent property owners obviously anticipate risks that potentially expose them to financial liability, addressing them by procuring insurance policies that impose a duty to defend against lawsuits. That is a recognized cost of doing business and securing protection, and insured parties generally assume it without reservations.

Of course, their willingness to do so is reasonably predicated on the assumption that their insurer will act in good faith to defend against a claim that is covered under a policy. Failure to do is obviously in bad faith and a response that renders the utility of a bargained-for policy illusory.

Unsurprisingly, an insurer’s failure to defend — in a timely manner and pursuant to a policy’s stated terms — can have devastating consequences for a property owner.

An insurance policy executed between an insurer and an insured party is a legal contract that comes with reciprocal obligations. When a policyholder parts with hard-earned cash to ensure protection against risk, an insurer benefiting from the contract has an obligation to perform when lawfully called upon to do so.

Time is often of the essence when an insured party is sued in a property-related matter. A proven insurance coverage dispute attorney can provide timely, knowledgeable and — when necessary — aggressive representation aimed at safeguarding a policyholder’s rights and fully promoting his or her legal interests.

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