Handling insurance defense cases creates an opportunity to regularly read insurance policies. It is not an easy task. They are long, complicated and sometimes confusing. Unfortunately, reading through your own policies is a necessary, albeit unappealing, task.
Insurance policies are like emergency savings accounts set aside to cover the unexpected. Insureds pay premiums and then insurers (the insurance companies) have money set aside in case something bad happens (e.g. there’s a car accident, a patient files a complaint, something is stolen, etc.). They can be written to cover all manner of things like property (a piece of art), injury to a person (following a car accident or slip and fall), or malpractice (if a client claims negligence by a professional). Policies are drafted to explain what they cover and what they don’t a.k.a. exclusions. It is important to make sure you have the insurance you need to protect yourself.
If you have a business you may just need a commercial liability policy or general liability insurance. But if you are a professional firm (e.g. massage therapists, or CPAs) you may also need to consider a professional liability or malpractice policy. As an individual you may need to consider homeowners insurance, or if you rent, renter’s insurance. You may want a life insurance policy to provide support for surviving family members or cover funeral or other unexpected expenses. And, of course, any driver/vehicle is required to have auto insurance to legally operate on the roads.
Because there so many different types of policies, it is important to talk with an insurance agent about your needs. It is equally important to review your policy to ensure that the coverage you needed and asked for is included. It is terrible to have applied for professional liability insurance and a commercial/business liability policy as a business, and to realize—after a malpractice claim is filed—that you were only issued and have only been paying for a commercial/business policy that doesn’t cover the patient’s claim.
It is also important to review and update policies anytime there is a change in life. For example, your small, solo business has just hired its first employee. Or, you just acquired a new building. Or, you were married and now have a spouse’s future to consider. Speak with an insurance agent after big life and business changes, or at least annually, to review your policy. But also take the time to read through the policy yourself. Again, it is never a good surprise to discover that the additional building your business bought—that was recently damaged in a fire—isn’t included on the list of covered premises in your insurance policy.
Finally, there are sometimes unexpected sources of insurance, or similar protections, worth considering. Credit card companies often provide travel insurance, rental car insurance or other protections for purchases made with the card. Before going on a trip or renting a car—and considering whether to purchase a separate policy—check with your credit card company about coverage and get the information in writing to review. Homeowners policies sometimes include identity theft protections, and many policies include legal defense costs if you are being sued.
When in doubt about whether something is covered, review your policy and talk to your agent. Or if you need an opinion about your coverage or whether your insurance company’s denial of coverage is correct, contact an attorney.
Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.
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