insurance claims defense
Property Casualty

A Good Defense

Paula Dixon
Paula Dixon
Senior Vice President, Property Casualty

As college basketball season comes to an end, it stirs some memories for me…and it may you as well. Do you remember 6-on-6 girls’ basketball? The origins of basketball go back to 1892. It was invented for boys. It was then further developed for girls and, in 1934, girls started playing a two-court, 6-on-6 game that put three forwards and three guards on each side of the center line neither were allowed to cross.

I have fond memories as a player under such rules. Being a participant at the “Big Show” State Championship and to walk in the Parade of Champions. Fans would pour in to be at this crown-jewel event hosted in Des Moines, Iowa. This era would come to an end in 1983 as the result of a lawsuit, which changed the selection of girls for college basketball for me and many others. My basketball days wouldn’t continue to college, because, well, I only knew how to dribble twice and had no shooting experience. (I was on defense).

Alas, many good things can spiral by the filing of a lawsuit. Our immediate response is “Who’s going to defend us? What should we expect?”

By definition, defend means:

DEFEND: [dih-fend] (verb)

  1. to ward off attack from, guard against assault or injury
  2. to maintain by argument, evidence, etc.; uphold
  3. to put your company’s assets on the line if left in an Agreement for Services

When it comes to contracts, you’ve probably seen this contract language: 

The Consultant/Contractor agrees to indemnify, defend, and hold harmless the Client, its officers, employees for any and all claims, damages resulting from the work/services. 

This can be a difficult play with insurance.

General Liability insurance will afford you defense if the claim for damages is a result of a bodily injury or property damage event. Essentially, you only get “two dribbles.” If a claim by the owner/client is for delay, cost overruns, loss, or profits, these do not trigger insurance because there wasn’t a bodily injury or property damage occurrence.

If you’re providing professional services and are seeking defense coverage under your Professional Liability insurance, this language could be interpreted that you are agreeing to defend your client and that you agree to retain and pay for their attorneys to sue YOU – regardless of negligence. As an insured, your professional liability insurance doesn’t allow you to “cross the line.”  Defense is only for your side of the court and to pay the legal costs you incur. Coverage is designed to defend YOU and will only pay for damages to others due to your negligent acts, errors, or omissions.

Bottom line? You should ALWAYS be cautious in agreeing to pay the defense costs for an individual/entity other than your own. Diligent review…and the assistance of your insurance broker and legal counsel…will result in winning results!

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