Insurance defense firms primarily focus on defending insurers through indemnification, such as when a policy holder causes a motor vehicle accident. Insurance defense also covers disputes over liability and obligations, such as when an insured party files a claim for an incident not covered under the policy. Insurance defense covers a wide area of practice; just about any area that offers civil liability insurance is covered under insurance litigation defense.
Indemnification is the transfer of liability from one party to another. When a driver causes a car accident, for example, he transfers his liability for the monetary damages he has caused to his insurance company. The insurer then contracts with an insurance defense attorney, who represents the driver at the insurance company's expense. In exchange for indemnification, the driver pays the insurance company a regular premium to help offset the cost of his claim.
A coverage dispute is an argument over what an insurance policy actually covers. This can happen when an insured party files a claim for an incident that is not explicitly covered by the policy, when there is a conflict over the verbiage of the policy, when the insured has exceeded his policy limits or when an insured files a claim for an incident that is explicitly excluded from coverage. Less often, coverage disputes may arise from disagreements over which insurer is liable in a primary/secondary insurance scheme, when there has been a lapse in coverage due to a clerical error on the insurer's part or when the insurer believes there is fraud or exaggeration on the insured's part.
Insurance litigation defense encompasses many different forms of civil liability, and thus offers a number of practice areas. The most common areas include auto accidents, homeowners insurance, workers' compensation and personal injury cases (such as slip-and-falls, defamation and mold exposure). Other practice areas include asbestos (mesothelioma) litigation, medical and professional malpractice, labor and employment, admiralty, environmental, governmental, toxic torts, product liability and professional negligence.
Despite the name, insurance litigation defense entails very little litigation. The primary goal of insurance defense is to settle every claim before the matter reaches the courthouse. Litigation is a very long and expensive process, sometimes lasting as long as 10 or 15 years before reaching a resolution, and insurance companies need to keep their overhead low to afford the claims they receive throughout the year. Because of this, insurance defense litigation focuses on settling claims whenever possible for as little as possible. An exceptional defense litigation attorney may actually appear in court only a handful of times throughout his or her career.
- "Civil Litigation: Process and Procedures;" Thomas F. Goldman, et al.; 2008.