Promptly inform your Illinois homeowners or business insurance carrier of any incident to avoid losses later - Gardi, Haught, Fischer & Bhosale LTD

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Promptly inform your Illinois homeowners or business insurance carrier of any incident to avoid losses later

By: Gardi Haught Fischer & Bhosale Ltd.

Individuals and business owners in Illinois purchase liability insurance policies to protect themselves from potential financial ruin in the event someone is injured, or worse, due to their or their employees’ negligence. Premiums for these policies are generally thousands of dollars every year, but the policy holders can rest easy knowing that if someone is injured due to their negligence their insurance carrier will cover the costs of defense of any lawsuit as well as any damages awarded to the injured party. However, even accidents or claims—which would otherwise clearly fall within the category of covered claims—may be denied if the insured fails to promptly notify its carrier that a potentially covered incident occurred, even if the insured had no reason to believe that someone was injured as a result.

This firm was involved in a recent case where a client was operating a piece of machinery unloading a tractor-trailer when the trailer moved unexpectedly, causing our client to fall. The company, which owned the property where the accident occurred, owned the trailer that unexpectedly moved and employed the driver of the trailer, failed to promptly notify its liability carrier that an accident occurred. It did not do so, according to the testimony of its employees, because it did not appear our client had been injured. According to their testimony, our client got up immediately and continued unloading the trailer with no objective difficulty. However, unbeknownst to them, following the accident our client began experiencing intense pain and ultimately had to undergo back surgery. Approximately a year later, a lawsuit was filed against the company and its driver, and they tendered the claim to their insurance carrier.

However, rather than provide a defense and potentially pay any judgment entered against their insured, the insurance company filed a separate lawsuit asking the court to rule that they do not owe a duty to defend based on the company’s failure to promptly notify them that an accident had occurred. In response, the company argued that it had no reason to believe that any injury resulted from the accident, and that it was not until they received notification that a lawsuit was filed. The judge agreed with the insurance carrier and ruled that, as a result of the company’s failure to promptly notify their carrier that an accident occurred, the carrier has no duty to either provide a defense to the lawsuit or pay any damages.

While the above example involves a commercial liability policy, the same arguments and considerations apply equally to homeowner’s policies. Imagine you are hosting a barbecue and one of the guests, perhaps a friend of a friend who you do not know well, sits on a folding chair which collapses. The guest, clearly embarrassed, insists that they are fine and there is nothing to worry about. You take them at their word, and eventually forget that it ever happened. Then, fourteen months later a sheriff’s deputy shows up and hands you a summons and complaint. The complaint asks for a judgment against you in excess of $50,000. You immediately call your insurance company, to which for 27 years you’ve been paying premiums for just such an occurrence. They respond by filing a lawsuit arguing you waited too long to notify them. The court rules in their favor.

In both the case involving this firm’s client and the above hypothetical, a quick phone call to the insured’s insurance agent would have led to the losses being covered, as opposed to looming financial catastrophe. So, if you are a business owner or homeowner, if a customer or guest is ever involved in any type of accident on your premises, regardless of how inconsequential it seems, prudence dictates that you immediately notify your insurance agent or carrier. That simple phone call could save you tens of thousands of dollars in both attorneys’ fees and damages verdict.

If you have questions related to insurance liabilities or injury matters in Illinois, contact the attorneys at Gardi Haught Fischer & Bhosale Ltd. by requesting a free case evaluation below

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