For Consumers

What you need to know about filing a business insurance claim if you’re sued

If you’re sued and file a claim under your business insurance policy, most policies require your insurance company to defend you and pay for legal costs. This is called “duty to defend” in your policy.

Picture of an exclamation point. Important:  When you buy a new policy or when your current insurer renews your policy, it may now include new endorsements that could affect you when your insurer defends you in a legal action. If your insurer believes your policy may not cover your claim, the company will send you a letter (called "Reservation of Rights") notifying you that you may be responsible for reimbursing the defense costs to the company if it later finds the claim is not covered.

Avoid any surprises

Promptly notify your insurer about any claims or lawsuits someone files against you. Most business policies require prompt notice. Late reporting could jeopardize your insurer’s ability to investigate, respond and defend you. If this happens, your insurer may be able to recover some of the defense costs from you, even if the claim is covered by your policy.

If you have any questions or see changes in your coverage, contact your insurance agent or broker, or an attorney. It’s important to understand your policy coverage and your responsibilities before a claim or lawsuit occurs.