Chapter 3 - § 3.2 NOTICE TO INSURER

• Jurisdiction: Colorado

§ 3.2 Notice to Insurer

Counsel for the defendant, when retained, should ask the client what insurance coverage may be available to cover the claims being brought against the client. Because it can be nearly impossible for a client to understand the language of an insurance contract, he or she may not be aware of what coverage is available for the claims. Counsel should ask the client to provide copies of all insurance contracts and policies so that an assessment of coverage can be made. In the absence of specific insurance covering a type of claim, other insurance the client has—such as an "umbrella policy" on the client's homeowners' policy—may provide the client with coverage. The attorney may have a duty to advise, or at least consider advising, the client to consult an insurance coverage attorney to ascertain the extent of possible coverage.

Putting all insurers on notice of the claim, on an over-inclusive basis, may be the safest way to protect the client's interests—though whether to do so should be the client's decision. There is no legal penalty for notifying an insurer of a claim when no coverage exists, but there can be serious problems, including refusal of coverage, if the insurer was not notified of a claim when coverage did exist.¹ The lawyer may incur liability to the client for failing to put all of the client's insurance carriers on notice.² Most insurance policies require immediate notification when the insured receives notice that there may be a claim against it. This duty to notify generally arises as soon as the insured knows of a possible claim, whether the insured is notified by letter, e-mail, receipt of a summons and complaint, or in any other manner.

If the insurer accepts coverage, the insurer may wish to choose legal counsel to defend the claim. If the insurer...