The three main types of insurance that companies deal with are property, workers’ compensation, and liability. Knowing how much is reasonable frequently poses significant issues for companies. Because lawyers know the “market” for damage claims, that is, how much a potential lawsuit or damage loss could amount to, it is generally a sound idea to confer with your counsel about your limits. Sometimes insurance agents are knowledgeable about this as well, but often they are not.
Another area of exposure is compliance with insurance reporting requirements. All insurance policies have requirements for reporting losses or claims. Some of these are complex and require creating steps of notification to attach coverage. If the proper steps are not taken insurance companies may be with in their rights to deny coverage for liability claims.
Finally, an equally onerous situation can arise when your insurance policies are not properly maintained or renewed. In a recent instance, a company near our home office failed to timely renew their workers’ compensation coverage. A horrific accident occurred where two young men were severely injured. Their injuries should have been covered under the company’s workers’ compensation coverage. However, because there was no policy in place, the lawsuit came against the company and up to the point of settlement the judge kept the individual owners in as defendants in the case effectively stripping them of limited liability.