At Sanders, O'Hanlon & Motley, we often advise small businesses in Sherman and throughout North Texas seeking counsel because they were named as a defendant in a lawsuit.  One of the most important considerations up front is whether the business has liability insurance.  If so, the insurance company should be notified immediately.

This is an extremely important issue for a small business.  Litigation can be expensive even if the defense is ultimately successful. Will the insurance company provide a defense and ultimately pay all or a portion of any judgment that may be obtained?

The duty to defend means the insurance company pays for the legal fees in defending the lawsuit.  Under Texas law, the allegations in the Plaintiff's lawsuit are compared to the insurance policy to see if the allegations potentially could fall within the scope of the coverage.  If so, the insurance company has a duty to defend.

In contrast, the duty to indemnify is dependant upon the actual facts uncovered in the lawsuit.  Thefore, it can take months or years to determine if the insurance company must pay for the actual damages assessed against its insured.

Insurance policies are complex, dense contracts.  It is important to have an experienced insurance coverage attorney review a policy carefully and explain the difference in the insurance company's duty to defend versus its duty to indemnify its insured.  You should contact experienced Texas insurance litigation lawyers if you or your business are facing insurance coverage issues. 

J. Michael Young (903) 892-9133