What is “coverage counsel” and why do I need it?
Lawsuits and claims often involve insurance coverage issues, particularly when it comes to construction, personal injury and product liability disputes. Those issues can have a significant impact upon litigation and efforts to resolve matters before trial. When insurance coverage issues arise, a policyholder should evaluate whether or not to retain coverage counsel to engage the insurance company for purposes of securing insurance coverage for defense and indemnification of the claim or lawsuit.
- From the beginning, the insured (or policyholder) must determine if its interests differ from those of its insurance carrier. For instance, if the insurance carrier is reserving its rights to defend and indemnify the policyholder and/or the policy limits may not cover the underlying claim, coverage counsel should be retained.
- Another issue is whether or not the insurance carrier will exercise an exclusion under the policy that would result in no coverage at all. This could result in the insurance carrier refusing to contribute to a settlement or satisfy a judgment (as well as seeking reimbursement for any defense costs it paid).
Each case is different, and not every matter requires retention of coverage counsel. However, if the insurance company is not providing the defense and coverage bargained for in the insurance policy, coverage counsel can provide advice and guidance to help navigate the world of insurance coverage.