A contract of insurance that protects a client from personal liability provides two important benefits. First, the insurance company will indemnify (cover) the client for damages that the client’s negligence may have caused to a third party. Second, and equally important, the insurance company has a duty to defend the client against the claim brought by the third party (or plaintiff). The following summary highlights important aspects of the insurer’s duty to defend. This is general information that we hope will assist insurance consumers understand what happens when they are sued for a type of claim or injury that is covered by their insurance policy.
In our everyday lives, a very common type of insurance is the motor vehicle insurance policy. An owner of a motor vehicle must purchase insurance in order to operate the vehicle on a public roadway. This mandatory insurance includes third party liability coverage up to a limit that is determined at the time of purchase. In British Columbia, motorists must purchase a minimum of $200,000 in third party liability coverage. Beyond this minimum, it is up to the individual consumer how much third party liability insurance they wish to purchase. Common limits of third party liability insurance are $1 Million, $2 Million, and $5 Million.
Accidents happen on BC roads every day. If you are at fault for an accident, your third party liability insurance protects you from personal financial responsibility for the injuries caused to others in the crash. You have a duty to report the accident to your insurer(s). The insurer then takes over communicating with the injured parties or their lawyers. Some claims are settled relatively quickly. Others may take more time.
If an injured party brings a legal action against you, your insurer’s duty to defend is triggered. The insurer has the exclusive right to defend against the lawsuit. This includes the right:
- to appoint and instruct a lawyer who acts jointly on behalf of you and your insurer;
- to admit or deny liability on your behalf in the lawsuit; and
- to take any actions the insurer considers appropriate to deal with the lawsuit.
As a defendant in the legal action, you have a duty to cooperate with your insurer and with the lawyer that they appoint. A failure to cooperate may lead to breach of your insurance coverage, in which case you would be financially responsible for the damages to the injured party.
As a defendant in a legal action, your involvement may include any of the following:
- You may be required to attend at a meeting with the insurer’s representatives or your lawyer to discuss the circumstances of the accident in detail.
- The plaintiff’s lawyer may schedule an appointment for you to attend an examination for discovery. If this happens, the lawyer appointed for you by your insurer will prepare you for the examination and will attend the examination with you. At the examination itself, the plaintiff’s lawyer will ask you questions about the accident and you will provide answers under oath.
- If the case proceeds to trial, you may be required to give evidence in court regarding the accident.
The lawyers at Harris & Brun Law Corporation act for Canadian and American insurance companies in all types of legal actions. We are experienced in defending cases involving head injuries; serious orthopaedic and neurological injuries; psychological injuries, including post-traumatic stress disorder, depression, and anxiety; and fibromyalgia and other symptom clusters. We take pride in being able to navigate the shoals of complicated litigation while maintaining our personal touch with the clients we have the pleasure to represent.
The materials provided on this site constitute general information relating to areas of law familiar to our firm lawyers. The information on www.harrisbrun.com is not intended to provide or replace legal advice. The facts of your case are important and may affect how the law applies. Therefore, general statements of law and comments made in materials on this website or information accessed through links on this website to other legal resources are not a substitute for getting specific legal advice from a lawyer qualified to practice in the jurisdiction where you are located.