What happens when your insurance company refuses to defend you?

In these cases, its important to understand that just because the insurance company asserts that the policy does not provide coverage, does not necessarily make it true.

Individuals and businesses purchase insurance to protect themselves and their assets: automobile insurance to protect them in the event of an accident involving a motor vehicle; homeowners insurance to protect their house and property; commercial general liability insurance to protect their businesses; professional liability insurance to protect professional business activities.

Each of these types of insurance generally protects the insured in the event a lawsuit or legal claim is filed or asserted against them. Often, insureds expect that if a claim is filed against them, their insurance company will step up and defend the person or business.

Insurance policies offer two types of protection: defense and indemnification.  An insurance company’s duty to defend requires that the insurance company defend the insured if a legal claim is asserted against the insured and the allegations “may potentially come within the policy’s coverage,”  Sphere Drake, P.L.C. v. 101 Variety, Inc., 35 F. Supp. 2d 421, 426 (E.D. Pa. 1999). (emphasis added).   The duty to defend exists even if the “claims against the insured [are] groundless, false, or fraudulent.”

On the other hand, the duty to indemnify is narrower. It requires that the insurer pay for any losses for which the insured is found liable.  An insurer has a duty to indemnify “only where the insured is held liable for a claim actually covered by the policy.  Whole Enchilada, Inc. v. Travelers Prop. Cas. Co. of Am., 581 F.Supp.2d 677, 694-95 (W.D. Pa. 2008).

Insureds are sometimes faced with situations in which a legal claim is asserted against them, but their insurance company denies coverage and refuses to defend them.  This leaves insured wondering what to do and where to turn.  Individuals or businesses could face significant expense to defend against the alleged claims.  This is especially difficult when the insured has been paying premiums expecting that their insurance company would protect them in the event of a lawsuit.

When an insurance company denies coverage, the insured can defend the claim itself or file a declaratory judgment action against the insurance company.  In a declaratory judgment action, the insured asks the court to review the insurance policy and the claims asserted and determine if the insurance company is required to defend the insured.  Many times, the court determines that the insurance company is wrong and that the insurance company is required to defend the insured.

Similarly, insureds can also face difficult and confusing situations when their insurance company initially agrees to defend them, but then files its own declaratory judgment action asking the court to rule that the insurer is not required to continue defending the insured.  If the court agrees with the insurer’s position, then the insurer would stop defending the claim.  Therefore, the insured has a strong interest in defending the claim to ensure that the insurance policy provides coverage.

Finally, there is a potential that an insurance company’s failure to defend an insured constitutes bad faith.  In such a situation, an insured may be able to recover their attorneys’ fees from the insurer.

Any time an insurance company does not agree to provide coverage under an insurance policy, it is important for an attorney to review the insured’s legal rights and options.

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The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Divorce, Threats and Social Media: Lessons From The Elonis Case

June 2, 2015

By Melissa M. Boyd, Esq.


“There’s one way to love you but a thousand ways to kill you.”

Supreme Court buildingIf your wife left you, and you wrote that post on Facebook, would it be construed as a threat? Certainly some people would see it that way, but the US Supreme Court has ruled that that type of social media post is not enough to get you convicted under federal threat statutes; yesterday (June 1) the Court overruled the conviction of Pennsylvanian Anthony  Douglas Elonis.

Elonis posted that message above, along with other violent messages, to his Facebook page after his wife left him, and was subsequently convicted of threatening her and sentenced to 44 months in prison. Elonis claims that he was not threatening his wife, but simply writing rap lyrics that were not representative of his true feelings, and his lawyer argued that the lyrics should be protected under the right to freedom of speech.

The Court said the government needed to do more than prove that a reasonable person would find the postings threatening in order to convict Elonis.  The Court did not squarely address the First Amendment issues raised by Elonis in trying to protect the threats imbedded in rap lyrics.  The question is one of intent:  Did Elonis mean what he posted or was he reckless in posting the choice content?

However, there is still a cautionary tale in this story: Just because Elonis’ conviction was overturned doesn’t mean he hasn’t paid a price for his social media posts. When people are in difficult marital or personal relationships, anger is not an unusual emotion. However, it’s best to not immediately vent your anger on social media.

So, as angry or frustrated as you may be, zip it when it comes to venting on social media about your ex, ex’s ex, mother/father of your child, in laws, etc. Maybe you won’t be convicted, but you could be the subject of a Protection from Abuse (PFA) order if you are blogging or posting about your ex in what could be perceived as a threatening way.  And if there is other evidence of your threatening behavior toward an ex or other family member, that additional evidence of a social media post, whether it’s rap lyrics or just plain ol’ words, could tip the scales in favor of a PFA against you.

As they said in movie The Social Network, the Internet is written in ink. What you post will never completely go away, and it can come back to haunt you.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

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