Insurance Defense: What it Means, How it Works

What Is Insurance Defense?

Insurance defense is legal representation that specializes in cases relating to insurance. Insurance defense attorneys may work for law firms that offer insurance companies legal help or may work as staff attorneys for the insurance company itself.

Understanding Insurance Defense

Due to the pervasive nature of insurance, there can be a plethora of litigation with multiple layers of policy to discern. Insurance includes workers’ compensation, automobiles, homes, and healthcare—all of which can lead to litigation over the veracity of claims and the fulfillment of policies. The insurance industry is also heavily regulated, which requires legal expertise that remains abreast of changes and amendments that affect the handling of the policies that insurance companies offer and process.

How profitable an insurance company is depends on the types of policies it writes, the amount of premiums it earns from underwriting activities, and the amount of benefits it pays out from claims made against its policies. Rather than take all claims at face value, insurance companies investigate the veracity of claims, and doing this requires personnel with legal expertise.

Special Consdierations

Insurance defense may involve a broad spectrum of legal issues relating to insurance policies and claims. Attorneys examine whether the claim being made is something covered in the terms of the insurance contract. For example, a flood damage claim made by a homeowner who has a homeowner’s policy without flood coverage would be challenged. Attorneys also seek to uncover cases of insurance fraud and false claims, including workers’ compensation claims in which employees may not be injured to the extent that they have claimed.

Insurance companies will also use insurance defense attorneys to defend policyholders from claims made against them. For example, insurance defense attorneys may represent an auto policyholder in the case that another driver is suing the policyholder for damages. The insurer may still wind up paying some damages, but the presence of a skilled legal team may lead to more favorable settlement terms.

Attorneys are also used by insurers to determine whether the types of contracts and business practices that the insurance company is involved in complying with regulations. Because state law primarily governs insurance regulations, insurers may find that what is considered legal in one state may not be considered legal in another. For example, insurance grace periods may vary from state to state, so insurers must be certain that they do not cease coverage on delinquent contracts before they are allowed to.