Here is good information for someone sued in Grand Prairie, Arlington, Fort Worth, Dallas, Weatherford, Lake Worth, Roanoke, Newark, Saginaw, and all other places in Texas.
What happens when you are sued? Does the insurance company automatically protect you?
Here is a partial answer to the above.
In 2008, the Texas Supreme Court decided a case styled, National Union Fire Insurance Company of Pittsburg, PA v. Beatrice Crocker. This was an insurance coverage case that went to the Texas Supreme Court from the Federal District Court asking guidance from the Texas Supreme Court on how Texas law handled the situation. This is called a certified question.
The principle issue was whether an insurance company has a duty to notify an additional insured of available liability coverage.
Here are some facts of the case:
Beatrice Crocker was a resident of Redwood Springs Nursing Home, which is owned by Emeritus Corporation. She filed suit against Emeritus and Richard Norris, a nursing home employee, seeking compensation for injuries suffered when she was hit by a door swung open by Morris. Crocker’s claims against Emeritus were covered by a commercial general liability policy issued by National Union Fire. Because Morris was acting within the course and scope of his employment when the accident occurred, he qualified as an additional insured under the policy. National Union Fire defended Emeritus, the named insured, but did not defend Morris even though the claims against him were covered by the policy and Natinal Union Fire knew he was a named defendant that had been served with legal papers. Morris was not aware of the terms and conditions of the policy and did not realize he was an additional insured under the policy. National Union Fire did not inform Morris he was an insured and did not offer to defend him. Morris did not forward the lawsuit papers to National Union Fire and did not ask them to defend him.
In this case, a judgment against Morris resulted when he did not appear for trial and National Union Fire did not defend him. Crocker then sued National Union Fire asserting she was a third party beneficiary of the policy. National Union Fire is claiming that Morris never triggered the duty to defend because he failed to forward the suit papers or otherwise notify them that he had been sued and he did not ask National Union Fire to provide a defense.
The insurance policy at issue here says:
“Before coverage will apply, you must notify us as soon as possible of an occurrence or offense which may result in a claim or suit against you.
Notice should include:
How, when and where the occurrence or offense took place;
Names and addresses of any witnesses and injured people;
Nature and location of any injury or damage.
Before coverage will apply, you must notify us in writing of any claim or suit against you as soon as possible. You must:
Immediately record the specifics of the claim and the date you received it;
send us copies of all demands, suit papers or other legal documents you receive, as soon as possible.”
National Union Fire contended that, because Morris failed to comply with the notice provisions, he did not invoke coverage or the right to a defense under the policy, meaning that Crocker, who now purports to stand in Morris’s shoes, cannot collect under the policy either.
The court went on discussing the law and citing other cases for support of their decision in this case.
The ultimate decision by this court was: “Insurers owe no duty to provide an unsought, unrequested, unsolicited defense. … Accordingly, because insurers need not provide coverage to additional insureds who never seek it, National Union had no duty either to inform Morris of available coverage or to voluntarily undertake a defense for him, and its actual knowledge did not establish lack of prejudice as a matter of law.”
An experienced Insurance Law Attorney knows ways to get an insurance company to provide a defense in cases such as the one above. That is a big reason why their advise should be sought early on in any potential claim a person has.
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