Shielding Insurers from Legal Storms: The Critical Role of Insurance Coverage Attorneys

Insurers can face coverage-related legal disputes in an extremely wide range of circumstances. From first-party claims to third-party claims, and from casualty claims involving catastrophic storms to liability claims involving vehicle accidents and construction defects, nearly all aspects of providing (or denying) coverage present risks for litigation.

This is where the role of the insurance coverage attorney comes into play.

Insurance coverage attorneys serve in a few key roles for insurers. An experienced insurance coverage attorney will be able to provide valuable assistance at all stages of the claims process—from preliminary assessment through dispute resolution (if necessary). By working closely with insurance coverage attorneys who understand insurers’ coverage lines, claims practices and risk profiles, insurers can not only streamline the claims handling process, but also ensure that they are paying no more than necessary.

3 Key Roles of an Insurance Coverage Attorney

What can an insurance coverage attorney do to help? As we said above, experienced insurance coverage attorneys will be able to serve in a few key roles:

1. Providing Coverage Opinions

Obtaining coverage opinions allows insurers to make sound decisions regarding complex coverage issues. While some insurance claims are relatively straightforward, many claims will raise legitimate questions regarding whether—and to what extent—the insurer is required to provide coverage. In these scenarios, engaging an insurance coverage attorney to prepare a coverage opinion ensures that the insurer has a legally sound basis for its coverage decision, whatever that decision might be.

Preparing a coverage opinion generally involves:

• Examining the Relevant Policy Language – Preparing a coverage opinion starts with examining the relevant policy language. This involves much more than just reading the policy. Experienced insurance coverage attorneys will be able to assess the implications of the relevant policy language based on prior experience, industry experience and other pertinent factors.
• Analyzing the Policy and Claim Under Applicable Law – Along with examining the relevant policy language, an insurance coverage attorney will also analyze the policy and claim under applicable law. This includes both applicable statutory provisions and common law decisions interpreting similar policy language in similar circumstances.
• Applying the Relevant Policy Language and Applicable Law to the Facts at Hand – After examining the relevant policy language and assessing all pertinent legal considerations, the next step is to consider the specific facts at hand. Does the policy clearly bind the insurer to provide coverage? Is the insurer entitled to deny coverage? Is there a legitimate question as to whether the claim is valid? These are the types of questions that a coverage opinion will answer.

The final step in the process is to prepare the coverage opinion itself. After providing a written opinion, an insurance coverage attorney will generally remain available to answer any questions about the opinion itself or the insurer’s potential next steps. Ultimately, at this stage, insurance coverage counsel’s role is to enable the insurer to make informed decisions.

2. Advising During Claims Investigations

Insurance coverage attorneys can also advise insurers during claims investigations separate from providing coverage opinions. There are a variety of reasons why an insurer might want to engage counsel during an investigation, including:

• Ensuring that the investigation is sufficiently comprehensive to meet the insurer’s “good faith” obligations;
• Documenting the investigative process and its findings; and,
• Analyzing legal issues that arise during the investigative process.

These are just examples. Depending on an insurer’s claims handling processes and internal policies and protocols, an insurer may retain insurance coverage counsel to assist with investigations as a matter of course, or an insurer may engage counsel on an ad hoc basis when questions or concerns arise. While both of these options can work, engaging an insurance coverage attorney early in the process will help ensure that the attorney has all of the information he or she needs to provide timely and sound advice.

3. Handling Coverage Disputes

While much of the work that insurance coverage attorneys do is proactive—focused on avoiding disputes—disputes involving insurance coverage are inevitable. As a result, insurance coverage attorneys routinely assist insurers with handling coverage disputes as well. This includes assisting with:

Settlement Negotiations

If the investigation of a claim (or group of claims) indicates that coverage is warranted, the insurer’s coverage counsel can provide advice and representation during the settlement negotiation process. Among other things, this includes providing advice regarding appropriate settlement terms and continuing to ensure that the insurer meets its “good faith” obligations.

Alternative Dispute Resolution (ADR)

Mediation and arbitration can be cost-effective tools for resolving insurance coverage disputes in many cases. Mediation and arbitration can both be tools for facilitating a settlement, while arbitration also provides the ability to obtain a binding decision without the need to go to court. Insurance coverage counsel can provide advice regarding the viability of pursuing alternative dispute resolution (ADR) under varying circumstances and provide representation in mediation and arbitration as warranted.

Declaratory Judgment Actions

A declaratory judgment action is a special type of litigation proceeding that is focused on establishing the parties’ respective rights rather than awarding a remedy (if a remedy is justified). In the context of insurance coverage disputes, insurers can use declaratory judgment actions to obtain judicial interpretations of their policy language either during or in anticipation of a dispute. An insurance coverage attorney can assess the likelihood of success of a declaratory judgment action and then take any legal action that is warranted.

Coverage Litigation

Insurance coverage attorneys can provide representation in coverage litigation as well. If litigating a coverage dispute is the best option under the circumstances at hand, it will be imperative to retain counsel who is familiar with the factual and legal issues involved.

Speak with an Insurance Coverage Attorney at Rendigs

Would you like to know more about how an insurance coverage attorney can help with your company’s claims handling and dispute resolution processes? If so, we invite you to get in touch. To speak with an experienced insurance coverage attorney at Rendigs, call us at 513-381-9200 or contact us online today.