The Insurance Company and The Duty to Defend in Injury Cases
You will often hear or read, or perhaps hear your personal injury attorney talk both about “The Defendant” and “the Insurance company for the Defendant.” You may even hear your attorney talk about “The Defendant’s attorney” or “The attorney for the insurance company.”
But what exactly is the role of the insurance company for the Defendant, in a personal injury case, and what’s the insurance company’s relationship to the Defendant?
Liability Coverage and the Duty to Defend
Every insurance policy that has liability coverage — which is the insurance company that pays for settlements or verdicts when Defendants are found liable in trial, or when they settle cases — has a provision that the insurance company doesn’t just pay what is owed to a victim. It also requires that the insurance company pay for the attorney, and defend the case, on behalf of its insured (in this case, the Defendant being sued). This is called a “duty to defend.”
When someone or a business is sued, the insurance company hires the lawyer and handles the case, for its insured, the Defendant.
Lawyer Is Doing Double Duty
But that puts the lawyer in a curious position. On the one hand, it is the defendant being sued, not the insurance company, in most cases. So the attorney should be, and is, defending the Defendant.
However, the attorney is hired by the insurance company under the duty to defend. And, because whatever is owed to the victim is being paid by the insurance company, the attorney is defending the financial interests of the insurance company — not the Defendant, who often stands to lose nothing out of its pocket.
The lawyer thus takes on double duty — in court, and officially, it represents the Defendant being sued, but really, it is being paid for and defends the financial interests of the insurance company.
In House Law Firms, Self-Insureds, and Adjusters
Many insurance companies have gone even further. Many that are involved in a lot of lawsuits — say, State Farm or Allstate or Progressive, have a duty to defend everybody they insure when they cause accidents, have their own “in-house” law firms, which are independent legally, but where all the attorneys are employees of the insurance company and paid a salary by the insurance company to defend them, and only them.
Making matters more confusing, some companies are “self-insured.” Large companies will set up their own insurance companies, just to insure themselves. This is true for companies that get sued often. They may find it easier to set aside money periodically, use that money to pay claims or verdicts, and have attorneys on salary to defend the lawsuits.
Making it more confusing, insurance companies aren’t human, so they need a human to be the “eyes and ears” of the company. Those are adjusters. The lawyer for the Defendant now communicates both with the Defendant, as well as the adjuster — and the adjuster will often attend court matters, like hearings, depositions, or mediations.
Don’t be confused. We’re here to help you with your injury case. Contact the Las Vegas personal injury lawyers at Cameron Law today for a free consultation to see how to help you with your claim or lawsuit.
