Determining the universe of potential insurance coverage is a crucial first step in investigating any claim. There are several effective ways of doing this and, if there appears to be no coverage, handling the uninsured tortfeasor issue. It goes without saying that the intensity of the coverage hunt is based on the needs of the individual case. Below is a roadmap for sussing out the available coverage, which can be suited to the needs of your case.
Generally, before a lawsuit is filed, the first step is to send written correspondence out to all potential tortfeasors, putting them on notice of your client’s claim, telling the tortfeasor to put its insurance carrier(s) on notice, and requesting that all applicable insurance policy limits be provided. Ideally, upon receipt of this correspondence, the tortfeasor will put its carrier on notice, and in the coming days and weeks, an insurance adjuster or an attorney will reach out to you.
From there, unless the matter can be resolved pre-suit, a lawsuit will likely be filed. Along with the pleadings, you should also serve interrogatory and document requests, as well as any relevant deposition notices. This is just good practice, but, if the prior correspondence produced nothing on the insurance coverage front, the discovery requests should push that issue to a resolution.
Within the interrogatories, there should be at least one interrogatory related to all applicable coverage. Within this interrogatory, it is important to request that the defendant establish the existence or nonexistence of other coverage, like umbrella and excess insurance policies. For whatever reason, a two-part interrogatory request serves this purpose well.
In the interrogatory, ask for the insurance coverage broadly and inclusively upfront, and then directly below that language, within the same request, but in a separate paragraph, add a note. Within the note, alert defense counsel that the interrogatory specifically inquires into all primary, umbrella, excess, or other applicable coverage.
This added note seems to provoke a more substantial response. Often, without additional prodding, defense counsel will likely only produce the primary coverage, and purport that the primary coverage, according to defense counsel’s perceived value of the claim, is all you really need (or what defense counsel thought the plaintiff was actually requesting).
Likewise, document requests should also have at least one request broadly seeking applicable insurance coverage and the actual insurance policies. Again, the incorporation of a note below the document request, emphasizing that the request specifically seeks documentation related to all primary, umbrella, excess, or other applicable coverage, will clear up any confusion and prevent obfuscation. And the mere existence of this language lays the groundwork for any resulting discovery motion.
If, based on your investigation, the defendant may be uninsured or has had its insurance coverage denied for some reason, then it is likely prudent to make specific discovery requests related to the defendant’s correspondence with its insurer regarding the underlying action (e.g., reservation of rights letters, coverage denial letters, etc.) or, at the very least, the identity of potential insurers. In that same vein, it may also be prudent to try to obtain information related to the identity of the defendant’s insurance agents or brokers. Documentation, in the defendant’s possession, related to its insurance procurement and the handling of its insurance claim should also be sought.
These requests will have varying degrees of kickback. Even so, it is never a bad idea to lay this foundation early on, in the event the information later becomes more relevant to your matter. Developing the existence of insurance coverage issues early on will be helpful for the long-term planning of the case and will help you anticipate the scope of potentially available settlement monies. And, in the event there is no coverage, you will be able to advise your client as early as possible and reassure them that you are doing everything you possibly can to find coverage.
By now, you should have sufficient information to assess the applicable coverage or, at the very least, be in a place to have a credible discovery dispute about obtaining that information. If there was an insurance policy (or one that should have been) in effect, but there is no coverage, then it may be prudent to start sending out insurance-related subpoenas. This is particularly true if the defendant is an individual or entity that one would reasonably expect to maintain insurance coverage (e.g., contractor, landlord, etc.), but, for some reason, has no coverage.
From here, with the information you have obtained thus far, subpoenas seeking documents from the insurance company and the insurance agent or broker procuring the insurance can be crafted. Once the subpoenas are responded to with documentation, review the documents and ensure that you have received an adequate response. If necessary, seek further documentation.
Now, assuming there is still no coverage, with the information gleaned from the defendant and its insurance-related providers, you should be in a position to have an educated conversation with the defendant. During the defendant’s deposition, you can inquire about the defendant’s insurance coverage or lack thereof, obtain further details about how the insurance coverage was procured, and determine the defendant’s knowledge about how their claim was handled. As an aside, even if there is insurance coverage, the defendant’s deposition is a great time to establish — on the record — the full universe of any applicable insurance coverage.
Depending on the information obtained from your investigation, discovery, and the defendant’s deposition, it may be worthwhile to depose the insurer and/or the insurance agents or brokers involved in the procurement of the defendant’s insurance. By now, if you have gotten to this step, the defendant most likely genuinely does not have coverage, and someone needs to explain why. By extension, the defendant has likely been paying out of pocket for attorney’s fees (and wants to know why), so the parties’ interests, to a certain extent, may be aligned.
Based on the information obtained during the insurance-related depositions, it may be that there simply is no coverage. Alternatively, there may be a legitimate coverage dispute that you have uncovered or tortious conduct, either in the form of negligence or breach of contract, on the part of the defendant’s insurance agents or brokers. From here, it may be possible to have a declaratory judgment action brought against the insurer or an action, sounding in negligence and/or breach of contract, against the insurance agents or brokers involved in the procurement of the defendant’s coverage.
The above is an approach to fully flesh out the existence of insurance coverage applicable to your client’s case. It may result in a definitive determination that there simply is no coverage. It may result, by virtue of the specific discovery requests, in the discovery of other applicable insurance coverage that might not have been adequately disclosed otherwise. And, assuming the rabbit trail leads the parties to a good faith basis for it, it may result in putting one or more of the parties in a position to assert direct or indirect claims against the defendant’s insurance carrier and/or insurance agents or brokers for the defendant’s lack of coverage. Whatever the result ultimately is, I hope this helps get you there.
Peter R. Chandler is a personal injury attorney at Sheff Law in Boston. He currently serves on the Massachusetts Bar Association’s Young Lawyers Division Board, where he is chair of the Technology Committee. His practice is focused on professional liability, product liability, premises liability, catastrophic motor vehicle accidents, construction site accidents and wrongful death.