The complicated and stressful world of law and insurance


Insurance companies are perhaps the biggest consumers of legal services in America.

This is partly explained by the fact that the two main obligations that an insurer has towards its insured under a civil liability insurance policy, whether it is a home insurance policy, liability commercial, professional liability or auto insurance policy, are the obligation to indemnify and the obligation to defend.

This means that when an insurer insures liability and a lawsuit is brought against the insured for a covered claim, the insurer, in addition to paying the claim to the limits of the policy, has a duty to provide a defense of the prosecution against its insured. at the expense of the insurance company.

As a result, we have law firm after law firm whose primary practice is to defend civil lawsuits against their policyholders at the request of insurance companies.

The way it generally works is if the insured receives legal documents on a covered claim, they contact their insurance company for coverage. The insurance company then entrusts the case to one of its law firms.

The law firm then contacts the insured to let them know that they have been assigned to defend the claim and that they will be the insured’s lawyer in the case.

Therefore, an attorney-client relationship is formed between a law firm specializing in the defense of liability claims at the request of insurance companies and an individual or business that had a policy with that insurance company and that was unlucky to be sued for his cover.

The insured is the client of the law firm and the insurance company pays the bill.

It is part of what an insured gets for their premiums if they are sued for a covered liability. It happens every day.

And the work of insurance defense, defending high volume lawsuits for insurance companies against their policyholders, is the bread and butter of many law firms.

These cases are referred to in the insurance defense world as “third party claims”, when the lawsuit is brought by a third party, not a party to the insurance policy, against the insured.

This is what makes insurance companies perhaps the biggest consumers of legal services.

Other circumstances in the insurance world also produce enormous amounts of work for lawyers, such as first party claims.

These are lawsuits brought by the insured, who is a party to the policy (hence the “first claims”), directly against the insurance company, when there may be a dispute as to whether a loss suffered by the insured, as opposed to a third party claim against the insured must be covered.

These cases may involve loss by fire, loss by theft and other catastrophes to an insured’s property where there may be a difference of opinion as to whether and how much an insurance company should pay its insured for. loss under the policy.

These disputes may arise as a result of differences of opinion as to whether the policy was in force at the time of the loss; if the insured has committed fraud by procuring the loss, for example by setting fire to his own property to recover it; or if the insured committed fraud after the loss by inflating the losses claimed.

These circumstances can all constitute a defense against an insured’s claim against an insurer, and the defense of first party claims, when the insurance company is sued by its insured, is also an important part of the business of insurance companies. insurance that provide work to its law firms.

I cut my teeth many years ago in the insurance defense world, working for a law firm where we worked all day on insurance litigation.

It was a wonderful experience for a young lawyer who was learning the trade. What I also realized after stepping out of this world is that insurance litigation, day after day, year after year, can be exhausting, difficult and stressful work.

And a lot of my friends and colleagues back then had careers representing insurance companies.

But not me. I was saved from this life by the opportunity to move to the suburbs and become a simple campaign lawyer, helping people and businesses with various types of issues, not insurance companies.

But my early years in the trenches of the insurance defense world gave me a great deal of experience and appreciation for the practice that I now enjoy.

Ken Garten is a lawyer from Blue Springs. Email him at [email protected]

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