Whether you are a business owner whose building burns down, the victim of employee theft, sued by a former client for bad advice, or sued by the employee of another company who was injured on your premises, disaster has struck and the sometimes overwhelming process of navigating the insurance world has begun.
We've outlined below the first four steps to get your insurance situation under control:
Identify Applicable Insurance Policies
First, identify all insurance policies that even might provide coverage. This includes not only your own policies—Commercial General Liability (“CGL”), Directors and Officers (“D&O”), Errors and Omissions (“E&O”), Employment Practices Liability (“EPL”) and others—but also the policies of third parties that may provide coverage to you, for example, as an “additional insured.”
Notify Your Insurers
Second, put all potentially responsible insurance companies on notice as soon as possible. This usually is an express condition in the “Conditions” section of the policy. It will spell out your duties if you have a claim, including notifying the insurer as soon as “possible and/or practicable.” Failure to provide timely notice can result in no insurance coverage.
Cooperate by Providing All Relevant Information
After you’ve given notice, you must cooperate with the insurer, for example, by providing documents and information. Like notice, this usually is an express requirement in the “Conditions” section of the policy and failure to cooperate can have adverse consequences for you.
Finally, call coverage counsel. Insurance coverage is a tricky and poorly understood area. Most policyholders have never read their policies, have no desire to read them, and would have trouble understanding them. An experienced coverage lawyer can help you with the above steps and others, so that you get the maximum recovery.
In future posts, we'll explore each of the above steps in greater detail.