Straightforward Answers To Your Questions About Insurance Claim Denials

Figuring out the complex world of insurance law without the help of an attorney is nearly impossible. That is why Golshani Lee LLP is here. Our insurance dispute attorneys, Shervin Golshani and Christopher Lee, make sure to answer your questions honestly and frankly. You can read on to find some of their answers to the questions about insurance law that they hear most frequently.

What is insurance bad faith?

Insurance bad faith refers to the refusal of an insurance company to fulfill its obligations to its policyholders. This can occur when an insurance company denies a claim that is covered under the policy, fails to promptly investigate and pay a valid claim, or fails to defend a policyholder who is sued.

Insurance bad faith is a serious issue because policyholders trust that their insurance company will be there for them when they need it. When an insurance company acts in bad faith, it can cause financial hardship and emotional distress for the policyholder.

What are my options if I suspect insurance bad faith?

There are laws in place to protect policyholders from insurance bad faith. If you believe that your insurance company has acted in bad faith, you may be able to file a lawsuit against the company to seek compensation for your damages. An experienced insurance bad faith lawyer can help you understand your legal rights and options and can guide you through the process of seeking justice and fair compensation.

What is the difference between first-party and third-party insurance policies?

In the context of insurance, a first-party policy is one that is taken out by an individual or entity to cover their own risks, losses, or liabilities. A third-party policy is one that is taken out by an individual or entity to cover the risks, losses or liabilities of another person or entity.

For example, a first-party policy might be a homeowner’s insurance policy that an individual takes out to cover the risks of loss or damage to their own home. A third-party policy might be a liability insurance policy that a business takes out to cover the risks of being sued by a customer for injury or damages.

First-party policies are generally designed to protect the policyholder, while third-party policies are designed to protect the policyholder from the risks or liabilities of others. The terms and conditions of first-party and third-party policies can vary, and it is important to carefully review the policy to understand the coverage that is provided.

What if a third party sues me?

Under California law, an insurer has a duty to defend its policyholder against any lawsuit that is potentially covered by the policy. This means that if the policyholder is sued and the lawsuit falls within the scope of the policy’s coverage, the insurer must provide a defense for the policyholder.

The duty to defend is separate from the duty to indemnify, which is the insurer’s obligation to pay damages that are awarded against the policyholder. While the duty to defend is triggered by the mere potential for coverage, the duty to indemnify is only triggered if the policyholder is actually found to be liable for the damages.

The duty to defend is an important protection for policyholders, as the costs of defending a lawsuit can be significant. If an insurer fails to fulfill its duty to defend, the policyholder may be able to bring a lawsuit against the insurer for breach of contract and bad faith.

Has my insurer breached its duty to defend me against a third-party claim or lawsuit?

Under California law, an insurer has a duty to defend its policyholder against any lawsuit that is potentially covered by the policy. A breach of the duty to defend occurs when the insurer fails to fulfill this obligation. There are several ways in which an insurer can breach its duty to defend, including:

• Refusing to defend the policyholder: If the insurer refuses to provide a defense for the policyholder even though the lawsuit falls within the scope of the policy’s coverage, it may be in breach of its duty to defend.
• Failing to provide adequate representation: If the insurer fails to provide a competent and aggressive defense for the policyholder, it may be in breach of its duty to defend.
• Delaying the defense: If the insurer delays in providing a defense for the policyholder, it may be in breach of its duty to defend.

If an insurer breaches its duty to defend, the policyholder may be able to bring a lawsuit against the insurer for breach of contract. The policyholder may be entitled to damages for any losses or expenses that resulted from the insurer’s breach.

What damages can you recover if your insurer has breached its duty to defend?

If an insurer breaches its duty to defend a policyholder under California law, the policyholder may be entitled to damages for any losses or expenses that resulted from the breach. These damages may include:

• Defense costs: The policyholder may be able to recover the costs of defending the lawsuit, including attorney’s fees and other related expenses.
• Settlement costs: If the policyholder is forced to settle the lawsuit due to the insurer’s breach of the duty to defend, they may be able to recover the costs of the settlement, including any damages that are awarded.
• Other damages: The policyholder may be able to recover other damages that resulted from the insurer’s breach of the duty to defend, such as lost income or damage to their reputation.

It is important to note that the damages that are available in a breach of the duty to defend case will depend on the specific circumstances of the case. An experienced insurance bad faith lawyer can help the policyholder understand their legal rights and options and can assist them in seeking appropriate damages for the insurer’s breach of the duty to defend.

What is a commercial general liability policy?

A commercial general liability (CGL) policy is a type of insurance policy that provides coverage for business-related claims of bodily injury, property damage, and personal and advertising injury. A CGL policy protects a business from the financial risks of lawsuits and other liability claims that may arise in the course of its operations.

A CGL policy typically covers a wide range of risks, including slips and falls on the business’s premises, accidents involving the business’s products, and injuries or damages that occur as a result of the business’s advertising or operations. The policy may also provide coverage for defense costs and legal fees associated with defending against a liability claim.

CGL policies are an important tool for businesses to protect against the financial risks of liability claims. It is important for businesses to carefully review their CGL policy to understand the coverage that is provided and to ensure that it meets their needs.

What is a professional liability policy?

A professional liability policy, also known as errors and omissions (E&O) insurance, is a type of insurance policy that provides coverage for professionals who may be held liable for mistakes or errors that they make in the course of their work. This type of policy is designed to protect professionals from the financial risks of lawsuits and other liability claims that may arise as a result of their work.

Professional liability insurance is typically required for professionals who are at risk of being sued for mistakes or errors that they make in their work. For example, doctors, lawyers, architects, and engineers may all be required to have professional liability insurance.

Professional liability policies typically provide coverage for defense costs and legal fees associated with defending against a liability claim, as well as for any damages that may be awarded against the professional. It is important for professionals to carefully review their professional liability policy to understand the coverage that is provided and to ensure that it meets their needs.

Does my insurance company have to pay for my lawyer?

It depends on the specific circumstances of your case and the type of insurance policy that you have. In some cases, an insurance policy may provide coverage for the costs of hiring a lawyer to represent you in a lawsuit or other legal proceeding. However, not all insurance policies include this type of coverage.

For example, many liability insurance policies, such as commercial general liability (CGL) and professional liability (E&O) policies, provide coverage for the costs of defending against a lawsuit or other legal claim. This means that if you are sued and the lawsuit is covered by your policy, your insurance company may be required to pay for your lawyer.

It is important to carefully review your insurance policy to understand the coverage that is provided and to determine whether it includes coverage for legal representation. If you are unsure whether your policy provides this type of coverage, contact our office for a free consultation.

Can I recover the attorneys’ fees I incur for suing my insurance company for coverage?

In California, legal precedent established in a case known as Brandt v. Superior Court, 37 Cal. 3d 813 (1985) provides policyholders who are successful in an insurance bad faith lawsuit may be entitled to recover their attorneys’ fees as part of their damages.

To be eligible for attorneys’ fees under this provision, the policyholder must be able to show that the insurer acted in bad faith in handling their claim. This may include showing that the insurer refused to pay a valid claim, failed to promptly investigate and pay a valid claim, or otherwise acted in a way that was designed to frustrate or delay the resolution of the claim.

If you are considering bringing an insurance bad faith lawsuit in California and are wondering whether you may be able to recover your attorneys’ fees as part of your damages, it is important to consult with an experienced insurance bad faith lawyer who can advise you on your legal rights and options.

What is an additional insured?

In California, an additional insured is a person or entity that is covered by an insurance policy in addition to the primary policyholder. An additional insured may be added to an insurance policy by endorsement or by a separate agreement with the insurer.

Additional insured coverage is often used in situations where one party (the additional insured) has a financial or contractual relationship with another party (the primary insured) and needs to be protected from the risks or liabilities that are associated with that relationship. For example, a company may require its contractors to add the company as an additional insured on their liability insurance policy to protect against the risk of being sued if the contractor causes an accident on the company’s property.

Additional insured coverage is typically limited to the specific risks or liabilities that are outlined in the insurance policy or endorsement. It is important for additional insureds to carefully review the policy or endorsement to understand the coverage that is provided and to ensure that it meets their needs.

We Have More Answers – Make A Consultation Today

This FAQ segment is only the tip of the iceberg when it comes to insurance law questions. Our insurance dispute attorneys can give more detailed answers when you speak to them in person. Please call us at 858-724-7908 or send us an email to schedule your initial consultation. Our lawyers speak Farsi and Korean.