A common problem I see that happens over and over is a client who thinks that insurance covers something that really isn’t covered. It is amazing how either insurance agents when insurance is purchased verbally lead people to believing that something is covered, the policy has changed over the years so that a matter is no longer covered, there is a misunderstanding, or the client is simply mistaken.
Often it seems when a client asks the insurance agent if something is covered, the insurance agent says “yes, yes, yes, it is covered.” When there is a claim, the insurance agent responds, “Oh, that is not covered.”
It is costly when clients believe that a matter is covered by insurance and only find out when something goes wrong that it is not covered. If there is no insurance coverage, the insured (client) may have to hire and pay for its own attorney while the insurance company will provide and pay for an attorney if a matter is covered by insurance. The duty to defend is a major benefit of insurance. Most importantly, without insurance coverage a client may be liable for damages for which it thought it had insurance.
Carefully review or have your attorney review your insurance policies from time to time, preferably annually. You may find that you do not have a full and current copy of an insurance policy. The insurance policy may have been slowly amended over the years by the insurance company. A “declaration page” is only a one or two page summary and is not the full policy. If you do not or no longer have a full copy of the current policy, contact your insurance agent and they will mail or email you one. If you review your own policies, be sure and pay particular and careful attention to the part labeled exclusions. Insurance policies are notoriously difficult documents to read.
If a matter is excluded for which you need insurance, if you notice it before something goes wrong, often your insurance agent can provide a rider or endorsement which insures the matter for an additional (and quite often nominal) premium.