Here’s how it works. If you have a good case against a corporation and it has reached court, your attorney can push the right buttons by alerting the in-house corporate attorney that the insurance adjuster is unreasonably exposing the corporation to a large judgment which could potentially bankrupt it.
First, you need to understand that the corporation has paid for an insurance policy. That policy says the insurance company is responsible for settling your claim. It protects the corporation up to the policy limits and it removes the corporation’s right to control and make the settlement choice. The insurance company adjuster has control and makes that choice. In most cases, the adjuster does not have to explain much about his/her reasons for settling: the settlement amount is low and there’s no need to check with the corporation.
But what if it’s a big case, and the insurance is good only up to one million dollars? What if a jury could enter a multi-million dollar verdict and there’s only one million dollars? If that’s true then the corporation urgently needs to get the case settled. The extra amount over its coverage has been “exposed.” Assets are now at risk. If the case does not get settled and it goes to trial, a jury verdict may be entered for more than the one million dollars. That’s called an “excess” verdict, because it exceeds the insurance policy limit. If that happens, the insurance pays its one million and the corporation is still liable for the balance: An “excess judgment.” The court enters the judgment after the policy limits are paid. The corporation is on the hook for all of the excess judgment.
So, enter the corporation’s house counsel. He of she can help. The counsel understands and knows that the adjuster is acting to protect the insurance company but only up to the $1,000,000. The in house attorney can protect his client by turning up the heat on the adjuster. The in-house attorney can write the adjuster and tell him/her that he/she is acting in “bad faith” by refusing to settle the claim for the policy limits. This is insurance code for: we don’t care if there‘s only $1,000,000. If you hang my corporation out to dry, make it go to court, and refuse to settle when there is a fair and reasonable settlement on the table, then be forewarned: if there’s an excess judgment, my corporation will sue your company for breach of contract/bad faith.
An experienced personal injury attorney knows how to push the right buttons when the situation calls for it. Please consider that if you’re in Palm Coast, Ormond, or Bunnell and are considering suing a corporation in the hope of a substantial settlement.