Defense Under a Liability Policy Pulled Right Before Trial -- And Then Reversed
Liability insurance policies, such as commercial general liability and professional liability insurance policies, require the insurer to appoint a law firm to defend the insured when a lawsuit is filed against the insured. In addition to the “defense” obligation, the liability insurance includes “indemnification”, meaning that any settlement, jury verdict, or judgment will be paid for by the insurance company, within the dollar limits and coverage of the policy. But the defense obligation cannot be overlooked as one of the most important aspects of a liability policy.
Our client was a lawyer on the verge of facing a trial against him for malpractice. His professional liability insurer, last minute and without warning, pulled the plug on its defense, leaving the client without an attorney for the trial. His prior attorneys, paid for by the insurance company up until the time of trial, had years of knowledge about the case, but were now not available.
We wrote an extensive letter to the insurance company with strong legal precedent showing that the insurer’s conduct was wrong and that it needed to immediately resume funding of the defense for the trial and re-hire the law firm that had been on the case all along.
The insurance company, after reviewing our letter and engaging in discussions with Mr. Quadrino, reversed course and resumed — successfully — the defense of the litigation.