Thursday, March 22, 2007

“Litigation Insurance” To Protect Your Company

Company owners, directors, and officers may not realize that when their company is hit with a lawsuit alleging property damage, bodily injury, personal injury, or advertising injury, the company may have insurance coverage to pay for the costs of its legal defense (and, ultimately, for any damages it must pay to the complainant). There is a good chance that your company has purchased general liability insurance, often referred to as Comprehensive General Liability or Commercial General Liability insurance. The company may also have purchased other policies to protect the company’s directors and officers, or against other liabilities faced by the company.

Key steps to take if your company has been, or likely will be, sued:

- Review the company’s insurance policies to determine whether the lawsuit may be covered. If necessary, engage legal counsel to provide coverage advice.

- Give prompt notice to the company’s insurer of the lawsuit or potential lawsuit.

- Cooperate with the company’s insurer throughout the litigation.

- Remember that insurers benefit from minimizing their exposure. Make sure the company’s interests are being properly represented. If necessary, engage legal counsel to ensure that the company’s rights are being protected and its coverage maximized.