An Insurer’s Duty to Defend: Does the Claim Fall under the Policy

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Almost all homeowners and businesses purchase insurance policies to provide financial protection from direct damage to businesses and real property that result from an unanticipated peril.  Because many policyholders focus on coverage for property damage, they often pay less attention to the importance of the liability portion of their policy.  Liability coverage under a homeowners’ policy or commercial general liability (CGL) policy yields protection from damages pursued in third party lawsuits.  This blog post focuses on whether a claim falls under a policy, triggering the insurer’s duty to defend.

When analyzing whether a claim falls under the liability coverage of a policy, an insured’s inquiry should begin with whether a “suit” exists.  This term refers to a proceeding like a civil lawsuit commenced by filing a summons and complaint.  However, the language used to define “suit” is fairly broad under most policies, so the term generally encompasses alternate dispute resolution (ADR) proceedings like mediation or arbitration.  Depending on the specific facts and circumstances, the term might even be broad enough to include certain types of proceedings brought by government agencies.

The next hurdle is to establish that the “suit” requesting damages was caused by an “occurrence”, which generally is defined as an “accident.”  The term accident typically includes ongoing or repeated exposure to the same harm.  Accidents in this context refer to unanticipated events while intentional acts of the insured are expressly excluded.  In other words, the claim generally will not be covered if the insured intentionally causes injury, or the harm suffered was the anticipated and natural result of the policyholder’s actions.

Another important issue involves whether the “suit” seeks categories of damages covered under the policy.  While liability coverage under CGLs and homeowners’ policies extend to personal injury and property damage, there are many nuances and exclusions that might apply.  Careful review of the policy and sound legal advice is essential to understand how courts in your jurisdiction interpret provisions related to damages covered under the policy.

A final consideration is whether the event or suit occurred during the effective policy period.  Policies frequently are cancelled and reinstated multiple times due to late premiums or non-payment.  This issue also can arise when the damage is ongoing and progressive over several years.  When there is a dispute over whether a claim arose during the policy period, coverage will depend on when the suit occurs (Occurrence-Based Policies) or when the claim is made (Claims-Made Policies).  Occurrence-based policies extend coverage for suits brought long after the underlying events that caused damage or injury if the events or damage occurred during the policy period.  Under a claims-made policy, coverage will be available only if the claim is reported or filed during the policy period.

If your insurance carrier is refusing to comply with its contractual obligation, you are invited to contact our law firm to speak to an experienced Miami insurance claims attorney.  My law firm specializes in representing policyholders in claims disputes in Miami and throughout Florida. Click here to read about some of our case results.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM. 

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