What is their reason for cancellation? Did they give you a written reason? Do you have cumis counsel?

Best,

Daniel Bakondi, Esq.

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As to whether the insurance company would still try to handle the claim to the best of its ability once you are no longer a customer (i.e. after date of cancellation), the answer is that so long as the insurance company remains liable for potential damages, it will act to minimize its liability. To the extent that the insurance company will have to pay the claim at the end of the day, it certainly is in its interest to keep the amount of potential payout as low as possible, regardless of whether or not it still insures you.

As to whether the insurance company will try to find grounds to try to rescind the policy, or agree to provide a defense but take a reservation of rights as to liability, or otherwise try to duck liability, such as by claiming that you made a fraudulent or material misrepresentation when applying for the policy, or failed to report the claim promptly, or are failing to cooperate in the defense of the claim, that's a whole different kettle of fish.

The short answer is that always depends on the exact facts. You can expect all companies to take a look at the application and file when a claim comes in -- which is possibly why it dropped you -- but what then happens often depends as much on the company as the facts.

While some companies are usually reasonably fair and have reputations for acceptable claims handling practices, there are some horrible insurance companies that consistently seem to go out of their way -- often outrageously and in bad faith -- to try to dodge liability by hook or by crook. (When companies act in bad faith, my colleagues and I at Advocate Law Group P.C. go after them hard on behalf of our clients.)

Anyone facing a significant claim -- even though it is covered by insurance -- is usually well served by consulting with knowledgeable insurance counsel at the earliest possible time for some advice upfront to minimize the likelihood that your own insurer will attempt to deny you coverage -- whether in terms of providing a defense, reserving is rights, or ultimately paying the claim.

My apologies for Mr. Bakondi. He pops up here periodically trolling for clients rather than answering questions. To answer your first question, there is no way for us to predict what your insurance company may try to do. I know of no policy of casualty or indemnity coverage (which is the only kind I can think of that would apply in this kind of situation) that has a loophole to allow the company to stop providing coverage once they start. Turning to your second question, casualty and indemnity policies come in two "flavors," occurrence and claims-made. Most business policies other than professional liability policies are occurrence. That means all claims that arise out of an "occurrence" during any time the policy is in effect are covered. Once an occurrence is covered, it is covered until the claim is settled, regardless of whether the policy expires, lapses or is cancelled at some later date while the claim is open. An insurance company owes the insured a fiduciary duty of complete good faith and fair dealing on any covered or potentially covered claim. So unless they want to expose themselves to liability to you for bad faith insurance practices, or they discover facts that would establish you were not entitled to coverage at the time of the occurrence, they should continue to handle the claim the same after the policy ends as before. If they do not, or if they tell you they are considering denying coverage, call me or any other good business litigation attorney right away. Otherwise, your cancellation should be no cause for concern about this claim.