Reasons to Not Withdraw Coverage

Costa Mesa employment lawyerIn some instances, your Costa Mesa employment lawyer may have to talk to an insurance carrier that provides insurance to the employer defendant. Your Costa Mesa employment lawyer may communicate that denying coverage can lead to negative consequences. In some instances, litigation may result in a greater degree of liability for the insurer. Three outcomes commonly occur after a claims adjuster denies coverage.

A Court Finds the Denial Wrong and Unreasonable

If the insurance carrier’s decision is found to be wrong and unreasonable, the insurance company can be subjected to greater liabilities under the insurance contract that go beyond the benefits that they should have provided in the first place. In some cases, the insurance carrier may be required to pay punitive damages to the insured.

A Court Finds That the Denial Is Reasonable but Still Wrong

A Costa Mesa employment attorney can explain that the insurance company can still face negative consequences if the denial was reasonable but wrong. For example, the insurance carrier may still have to pay out more than if the coverage had been provided to start with.

A Court Finds the Denial Is Correct

Even if the court determines that the denial is correct, the claims adjuster may still cause the insurance carrier to pay secondary costs of litigation. The cost of defending against a bad faith insurance claim is often high.

Talk to a Costa Mesa Employment Lawyer

If you would like more information on this topic, contact Daily Aljian, LLP, at 949-861-2524 to set up a confidential consultation.