Suppose the unthinkable occurs and you or your business is involved in a serious accident and are sued. Fortunately, you have liability insurance and the insurance company agrees to cover and defend the case. Problem solved, right? Maybe not.

While many people believe that the attorney appointed by the insurance company to defend the case is protecting their interests in the lawsuit, that is not always the case. Insurance counsel must follow the directions of the insurance company and, depending on the value of the claim and the amount of insurance you have purchased, a judgment easily could exceed the policy limits of the coverage, leaving you or your business exposed to liability for any excess judgment. In such cases, businesses should have independent counsel, in addition to counsel appointed by the insurance company, to monitor and help resolve the case in a manner beneficial to the insured, not the insurance company.

Independent counsel can serve this role in a variety of ways. For example, in the course of litigation where the amount of coverage available on a claim may not be sufficient to cover a judgment, the insurer may have the opportunity to settle the case for the policy limits. In such situations, independent counsel can play a crucial role in airing the insured’s view of the case and encouraging the insurance company to accept the settlement, thereby avoiding any potential personal liability to the individual or business.

Without such active involvement by independent counsel, the insurance company may choose to reject such a settlement demand and roll the dice at trial, leaving the insured on the hook for any judgment in excess of the policy limits. Having independent counsel in place to watch your back and protect your interests and those of your family or business is a valuable tool to have in your arsenal when dealing with insurance litigation.