IS A CLAIM COVERED? LOOK BEYOND THE OBVIOUS
First, Happy New Year! Hoping that you and yours have a wonderful, love filled and prosperous 2024.
Every insurance adjuster is taught to first determine whether a claim is covered under the policy. The basics are to look at the date of loss, look at the dates of insurance coverage, look at the named insured, determine whether the defendant is an insured under the policy, by applicable statute, or common law. But how often do insurance examiners adjusters miss the more nuanced coverage issues?
Take the recent explosion of premises liability claims in the state of Michigan. In the fog of dealing with an influx of slip/trip and fall claims, insurance companies and their adjusters are simply assuming that coverage exists because the claim falls within the coverage period, the named insured is the defendant in the lawsuit, and the loss occurred at the insured address. But what about how the loss occurred? What about the circumstances surrounding what the insured was doing just prior to the loss? Delve deeper, and there may be a valid reason to contest coverage.
Take the gentleman who is insured by ABC Insurance under a personal line homeowners insurance policy. Mr. Homeowner is employed by day canning tomatoes. In the evenings, Mr. Homeowner operates a for- profit neighborhood automobile repair shop out of his home garage. Unfortunately, one of those customers slipped and fell on some ice, breaking his leg. He sues Mr. Homeowners under a theory of premises liability. ABC Insurance may have good reason to deny a defense or coverage on this claim because the policy most likely excludes claims arising from business activities.
Under the foregoing factual circumstances, ABC Insurance has a few good options. It could send a letter declining a defense or indemnification, summarizing the facts and the applicable insurance policy exclusion. The insurance company could provide a defense under a reservation of rights, again citing the applicable facts and applicable insurance policy provisions. Or, it could file a Complaint for Declaratory Relief (Declaratory Judgment) asking the court to determine if coverage is applicable. The declaratory action should name the claimant(s), the insured(s) and any other interested party so that any judicial ruling would be binding upon them.
This is all just food for thought. These types of scenarios are very case specific and insurance policy language specific. The point being, think deeply before assuming that insurance coverage is owed.
About Alexander & Angelas, P.C.
Alexander & Angelas, P.C. represents defendants in civil liability litigation across Michigan and Northern Ohio. The firm’s practice areas include insurance defense litigation, premises liability, motor carrier (trucking) defense, corporate and commercial litigation, construction defect litigation, auto negligence, insurance coverage disputes, emergency casualty response services, alternative dispute resolution, subrogation claims, workers’ compensation, employment law, and liquor liability.
Attorneys practice in all state and federal courts in Michigan, including Wayne County (Detroit), Macomb County (Mount Clemens), Oakland County (Pontiac), Washtenaw County (Ann Arbor), and Genesee County (Flint). Legal services are also provided in Northern Ohio. Since its founding in 1992, the firm has litigated over 4,000 civil cases.
A 24/7 Emergency Hotline is available (800-219-0007) for trucking and insurance company clients. When an accident requires an immediate response to protect evidence, members of the firm quickly launch an investigation with the assistance of well-qualified accident investigators, crash re-constructionists, mechanical engineers, civil evidence photographers, and independent adjusters positioned throughout Michigan and Northern Ohio.
Alexander & Angelas, P.C. measures its performance based upon three key metrics: aging of claims, indemnity expense, and legal defense costs. The firm refuses to over-litigate cases merely to increase legal fees and strives to resolve matters within one year from initial case assignment.
