Our Pittsburgh litigation lawyers get asked: “I’ve been sued — or someone has threatened suit on me. Now what?!” Of course, you need to hire an experienced civil defense lawyer to timely respond. However, there is something else that’s just as important: identify all liability insurance of yours, to cover the costs of defending a lawsuit.
No liability insurance? No worries. We’re here for you! But let’s first check what insurance coverage might apply to help defend this matter.
Call Our Pittsburgh Lawyers For Assistance:
412.342.0992
Quick Summary of Liability Insurance Considerations
Anyone who has received either a threat of suit — or has been served with a lawsuit as a Defendant — should immediately consider whether they have liability insurance to their defense costs, at the very least. And have defense counsel ready to respond to the suit, if no coverage exists.
Liability insurance is not required in Pennsylvania, except when it comes to motor vehicle operation. If you have a mortgage, your lender will require you to carry homeowner’s (liability) insurance. Some landlords require tenants to carry renter’s insurance, with liability protection.
Homeowner insurance and renters insurance have exclusions, but when coverage exists, it covers your legal defense costs — even for events that occur off the property in some instances. Plus there are other sources of coverage for defense of litigation, such as prepaid legal plans. No coverage for the suit, call us either way! We’ll defend it.
Call Our Pittsburgh Lawyers For Assistance:
412.342.0992
Importance of Triggering Liability Insurance
Defending litigation — of any kind — is expensive. Lawyers charge from $150 to $400 per hour in Western PA. And that’s just litigation costs. A person sued in court also faces a money judgment against him, which can be used to garnish assets — and even suspend one’s driver’s license (for vehicle-accident claims) — if not satisfied.
However, if the claim is covered by your liability insurance in effect at the time of the accident, insurance will cover (a) the value of the claim (up to your policy limits) or (b) your litigation defense costs, or (c) both. So what, then are the types of claims covered by insurance?
Claims Typically Covered by Liability Insurance
Before we talk about the little-known areas of liability coverage, let’s talk about the obvious coverage areas. Most people are aware of their coverage — and expect it to apply — when:
-
- They cause a motor vehicle accident, and promptly decide to use the required coverage in PA, or
- Someone falls on the steps of their home and brings a claim for injuries for the failure to maintain the steps. Here, most know to turn the claim over to their homeowner insurance coverage carrier.
In each of the two examples above, if you’re the defendant, your liability coverage will likely pay for both defense costs and the value of claim up to the amount of your coverage.
So, for example, let’s say you’re texting while driving and you carelessly rear-end the vehicle in front of you, causing bodily injury. You carry the minimum “15/30” bodily injury coverage in PA. What’s “15/30”? It means, your carrier will not only pay to defend you, but also pay up to $15,000 (the “15”) for the bodily injury you caused per claimant. And here, it will also pay up to $30,000 (the “30”) in total for all claims from the same accident. So if there were four people in the car you hit, and all suffered injuries, they’ll get no more than 30K total from your liability insurance carrier.
When Public Policy Prevents Coverage
Notice one thing in common about the fall and motor vehicle injury examples above: negligence. In general, liability insurance only covers negligence, which means a mistake, or a lapse in judgment, but not something done intentionally, like assault. In fact, in PA, it’s illegal for an insurance company to cover intentional conduct. It’s against public policy — meaning it’s not allowed. But why? The law aspires to discourage conduct intended to cause injuries. For more, click here. The following are some examples:
-
- Assault and battery related damages,
- A car accident where the Defendant intended to cause harm, using the vehicle as a weapon,
- Theft of a trade secret, or
- Intentional defamation of another’s character.
Thus, if a party suing you has an experienced attorney, that attorney may characterize some or all of the claims against you as “negligence” to trigger your liability insurance. For example, representing someone injured in a bar fight, a crafty plaintiff-lawyer may allege civil “assault.” However, he will also claim that the Defendant’s fist had “negligently” come in contact with the Plaintiff’s face, which sounds odd, but on paper, it may be enough to trigger insurance coverage. Or, the Plaintiff will claim you “negligently” defamed him on Facebook, by publishing false information about him that harmed his reputation.
Characterizing A Claim as Negligence to Trigger Coverage
Using the word “negligence” when presenting a claim to the Defendant can be the difference between recovering insurance money from the Defendant’s insurance carrier and a true mess for all parties. Why a “mess” for all? On the plaintiff-side, when a defendant lacks liability insurance, most attorneys representing plaintiffs will charge the plaintiff an hourly fee for legal services. Some plaintiffs will still go forward, on principle, even if it results in a near “worthless” judgment. We say “worthless” because, aside from destroying the defendant’s credit rating, the judgment may have no value, other than forcing the Defendant into bankruptcy if he does have assets, such that nobody truly “wins.”
No Liability Insurance Coverage: Failure to Perform Contractual Duties
If the claim against you is for breach of contract alone, it’s highly unlikely any liability coverage will exist by any carrier. In each of the above instances, no liability insurance coverage will exist for either (a) money to compensate the plaintiff for damages to prevent a judgment against you, or (b) your defense costs. However, there are a few key exceptions:
-
-
- Construction and/or property renovations involving “resulting damage.” The classic example is, a tipped over paint can, causing unexpected damages
- Breach of contract also involving negligence, such negligent repairs to a building causing personal injury. For example, in Brown v. City of Oil City, 294 A.3d 413 (Pa. 2023), a party slipped and fell on premises due to a latent defect in the construction and/or repair of the property. The contractor and/or builder’s liability insurance will likely cover the claim for injuries, even though a contract governed the repairs performed by the Defendant.
-
In each of the above two examples, the defendant’s liability insurance carrier will likely pay for both the plaintiff’s damages (up to the limits of the policy) plus his defense costs. However, in debt collection cases, using the word “negligence” will do nothing to trigger insurance. Why? Because the failure to pay a debt is purely contractual. There’s no “negligence” or physical damage component.
Whether You Do or Do Not Have Liability Insurance…
Our Pittsburgh lawyers can help you evaluate whether liability insurance coverages exists to defend the claims against you. And if there’s no such coverage, we’re right here and available to jump in and defend you right away. In fact, many of our cases involve us defending parties not covered by liability insurance.
So call or email today!
412.342.0992
