by Aneeta Kumar 

When an insurer denies a liability claim, don’t just accept it.  Independently evaluate coverage by looking at all of the facts and allegations, and at the entire insurance policy, to identify possible grounds for coverage.

A carrier may base its coverage determination on facts alleged in the complaint or other claim documents.  However, insurers must consider all facts and allegations in assessing whether there is a possibility for coverage under their policies.

Additionally, even if coverage may not exist when a lawsuit initially is filed or claim first is made, coverage may later develop based on facts or allegations in amended pleadings, discovery responses, motions filed by the parties, or other documents relating to the claim or suit.  Continue to examine all facts and allegations as the claim or lawsuit develops to determine if they might trigger coverage under your insurance program.

In many circumstances, an insured may have strong arguments that it is entitled to at least a defense from its carrier, even if the carrier ultimately may not be required to pay for a judgment or settlement.  The duty to defend under California law is extremely broad, embraces claims that “potentially” give rise to covered damages, and may arise even where coverage is ultimately found not to exist.

Therefore, don’t simply accept a carrier’s initial determination of non-coverage.  Evaluate the carrier’s positions and monitor the facts and allegations to determine if coverage now exists or later develops.  Then write back explaining why you refuse to take “no” for an answer.

Aneeta Kumar
Aneeta Kumar is an attorney and partner in Kumar & Gerchick. Her practice focuses on representing and advising policyholders regarding insurance coverage matters.