Q: I have always believed that by paying for insurance coverage, I was buying peace of mind so I could make things right should an accident occur. Two years ago, an employee of my company hit a pedestrian while making a delivery. The injured person made a demand for his severe injuries. Although the demand is large, I view it as reasonable. Importantly, the demand is at the limits of my business’s insurance policy. My insurance company, however, sees things differently and has made a low offer to settle the case. Years have passed since the accident, and the injured party is now threatening to take the case to trial. We do not need the bad publicity or the distractions associated with trial. In addition, the employee who caused the accident did not have the best track record. What can I do to make my insurance company pay what it should, so that we can put this incident behind us and not risk our business’s reputation?
A: You might consider engaging separate counsel to represent your interests with respect to the insurance companies claim practices. Insurance companies are in the business of paying as little as possible for claims made by injured claimants. Thus, the insurance company’s business interests, and your interests, may not be entirely aligned. Fortunately, there are legal theories that can be used to convince the insurance company to settle the case if it is reasonable for it to do so. For example, insurance companies in New Hampshire have a duty to exercise reasonable care when deciding whether to settle a case so as to not expose their insured to an excess jury verdict. In deciding whether or not to settle, the insurance company must be as quick to compromise and dispose of a meritorious claim as if itself were liable for any jury verdict in excess of the policy limits. Separate counsel may help marshal the facts and persuade the insurance company of the legal risks associated with trial, and the potential claims that could be asserted by your business, against the insurance company, should a jury return a verdict in excess of the policy limits.