Almost every attorney in civil practice in California will find it necessary to consider insurance issues. My client is a defendant–will liability insurance pay defense costs? My client is a plaintiff–will an insolvent defendant’s liability policy cover a judgment? My client suffered a loss to real or personal property–will its property insurance cover the loss? A few attorneys will specialize in that area, but most will address the issues only as they arise or as necessary. However, California has an enormous and complex body of statutory and case law addressing nuances of coverage under many different areas of insurance. How do you get the information and expertise you need for your practice from the wealth of information available? This article provides comments and suggestions from two different perspectives.
Insurance policies are often an untapped or under-utilized resource in the legal arena, the existence of which can—and often does—significantly decrease your client’s liability exposure and increase the likelihood of successful resolution. While the insurer’s obligations to its insured and certain third parties will necessarily depend on the precise policy language, a California insurer generally owes a duty to (1) defend the insured (i.e., pay the costs of defense) in a lawsuit brought by a third party alleging covered damages, (2) indemnify the insured for damages it becomes legally obligated to pay as a result of covered claims, and (3) act fairly and in good faith in discharging such obligations. While attorneys routinely consider insurance for cases involving auto collisions or fire damage where insurance is clearly at issue, there are countless other instances where insurance could—and should—be considered, and the failure of an attorney to timely do so may unnecessarily forfeit the use of an invaluable asset and expose the client to additional risk.
I am sure this will come as no surprise, but when I dreamt about becoming an attorney, no part of that dream involved insurance. In fact, until I started practicing in insurance coverage, my familiarity and experience with the subject—as well as my desire to gain familiarity or experience with same—was, at best, minimal. Now, having been exposed to California’s legal framework relative to insurance and witnessing first-hand the interplay between insurance and civil litigation, I cannot over-emphasize the importance of every civil attorney having, at minimum, a basic understanding of both insurance policies and insurance law.
While California arguably has the most robust and nuanced body of law in this area, there are abundant resources available to answer whatever questions may arise, or to assist in connecting you with someone skilled in the area to provide guidance or direction. As a younger attorney with relatively limited experience in this area, it became essential to identify which of the available resources provides the most relevant and reliable information, and to incorporate such resources into everyday practice in order to bolster and further develop my understanding of this complex and ever-evolving area of law.
While things have undoubtedly changed, some of the old ways still have value.
Insurance issues arguably arise throughout the course of every civil attorney’s career, and thus a basic understanding of insurance law and/or the ability to utilize relevant and reliable resources to develop such an understanding is something every civil attorney should possess. Irrespective of your chosen practice area, it is essential to develop your own knowledge and skill in the area, and to ferret out the best resources available to ensure you have the ability to efficiently and effectively anticipate and address insurance issues. While an in-depth analysis of insurance policies and insurance issues are outside the scope of this article, merely being cognizant of insurance issues and having resources readily available to help address same if and/or when needed could ultimately mean the difference between victory and defeat.