There are several scenarios in which insurance companies need to hire legal representation. The most common reason an insurance company might contact a lawyer is to defend a policyholder from a plaintiff. Insurers are contract bound to defend their policyholders if the claim at issue falls within their coverage.
Many insurance companies don’t have teams of in-house defense lawyers in every jurisdiction in which they have policyholders. When lawsuits arise, they need to hire outside insurance defense lawyer in the appropriate jurisdiction to negotiate for and defend their client or their company’s financial interests.
Insurance companies – and many other large organizations or businesses that operate in multiple jurisdictions – have a panel of law firms for those situations.
These are local attorneys they essentially have on speed dial in case they need someone local to head up negotiations or respond to legal actions brought by plaintiffs, or in some cases their own clients.
What Do Personal Injury and Property Damage Defense Lawyers Do?
A personal injury defense attorney represents the defendant in civil litigation. If you get into an auto accident with another driver, and the other driver sues you for damages, your insurance company will likely be required to hire a personal injury defense attorney for you.
What a personal injury defense attorney does isn’t all that different from want a plaintiff attorney does. That is why many personal injury lawyers provide both plaintiff representation and defense representation for insurance companies and businesses.
Can’t I Hire or Choose My Own Personal Injury Defense Attorney?
If you have the resources, you can potentially hire your own attorney if you’re being sued. Most people who find themselves in these situations rely on the insurance company to supply a defense.
Personal injury plaintiff attorney’s work on a contingency fee basis. Instead of getting paid an hourly rate the personal injury lawyer will get paid a percentage of whatever they win. Contingency fees allow injured people to get highly motivated representation for no upfront costs. The more money their personal injury plaintiff lawyer negotiates in a settlement or wins at trial the more they get paid.
If you’re the defendant you won’t be seeking damages against the plaintiff (unless you counterclaim), so there’s no settlement or verdict out of which you could compensate a defense attorney. You would likely need to pay for representation upfront and out of pocket.
Keep in mind insurance companies have an incentive to put up a good defense on your behalf. They will be the ones to pay damages to the plaintiff, so they have money on the line as well.
The Tripartite Relationship
Whether you’re a business owner or the defendant in a personal injury case, it’s worth your time to learn about the tripartite relationship and what that might mean for you.
The insurance company: The insurance company has a duty to defend their policyholder against covered claims. That also means they have final say over the defense, negotiations and claim settlements. There are scenarios in which the insurance company’s interests and the insured’s interests don’t align.
The insured: The main duties of the insured is to provide timely notice of the claim and actions against them and to cooperate fully with their defense team and insurer.
The defense attorney: The defense attorneys are viewed as representing both the insurer and the insured. Some difficult questions can arise regarding who the primary client is and whether the priority is to provide the most diligent defense of the insured possible or to minimize the insurer’s costs.
When Would Businesses and Insurance Companies Need Lawyers?
Both insurance companies and businesses might want to obtain their own representation for any type of liability claim. Examples of specific types of cases include:
- Auto accidents
- Customer injuries in stores and retail establishments
- Worker injuries on construction sites or manufacturing and industrial facilities
- Dram shop or liquor store drunk driving liability claims
- Malpractice or professional liability claims
- Truck accidents or injury accidents involving fleet vehicles
Insurance companies might also seek outside counsel for cases that aren’t directly linked to a specific injury or property damage claim. These could include disputes over:
- Insurance bad faith litigation
- Declaratory judgement actions
- Disputes over coverage
- Contribution claim disputes, counterclaims and crossclaims
Should You Get Your Own Litigation Defense Attorney in Atlanta?
Many businesses in Atlanta contact Edwards when they’re faced with liability litigation or significant claims. As a law firm that has represented every type of party in the past – insurance companies, policyholders and plaintiffs – we’re uniquely qualified to advocate for your best interests.
Our boutique law firm understands the unique hurdles that can complicate litigation for insurance companies and their clients, and we have a deep commitment to doing what’s ethical and in the best interest of our clients.
Call Edwards at (404) 526-8866 for a free consultation.
