Insurance against litigation

Insurance allows people a sense of security. It is a precaution against an outcome that isn’t desired, which may be in regard to either business or personal life. It is financial loss that people are afraid of incurring, and hence they choose to get insurance which manages and, in a way, transfers the risk.

This transfer of risk takes place when an individual gives money in exchange for that risk. It is now a fact that people have become so dependent on insurance, and that it has become so ingrained into society that it has become close to impossible to run anything without it - cars, homes etc.

The law on insurance

When an individual or a company purchases an insurance policy, the insured might expect the insurance company to act on their behalf in the event that the insurance topic occurs. Although this is often the case, sometimes the insured and the insurance company are the opposing parties to a legal dispute.

The most commonly known and used insurance policy is motor insurance. Compensation which is paid as a result of a traffic accident is usually either paid by the injured party’s insurance or by the other party’s insurance, if the accident is proven to be their fault. However, when the insurance companies calculate the exact sum of compensation they should pay disputes often arise.

Disputes over insurance compensation may end up in court. The insurance provider may argue that none or only part of the compensation demanded is covered by the policy. An example would be in construction insurance. If flood waters cause a wall of an adjacent property to collapse onto another’s property, it is possible that the insurance policy of neither party will want to take responsibility.

Insurance litigation

Litigation is the process of taking a complaint through its court proceedings. Litigation comes in handy in almost every area, be it:

  • Family
  • Criminal
  • Civil
  • Commercial
  • Insurance

Insurance litigation involves the attempt to resolve disputes within the insurance world. A complaint is usually lodged by a claimant against the defendant for causing them considerable damages or personal injury.

Relating this to the case of insurance litigation we can decipher that insurance litigation could take place between insurance companies and individuals. An individual who has suffered damages because of his insurance company could file a lawsuit against them. The filing of this lawsuit and going through the court proceedings would be referred to as insurance litigation.

Insurance litigation firms will aim to help you, as the client, in a variety of different ways - some of which may involve insurance claims and disputes. They will assist you in dealing with:

  • Reinsurance
  • Policy interpretation
  • Settlement agreements
  • Claims
  • Recoveries

For information on funding your case through insurers, see our page on legal expense insurance.

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