In response to COVID-19 we're temporarily adjusting office hours to close at 4PM PST. View our hours.

Responsible party in a lawsuit

Q: "I had a lawsuit filed against my company a year ago. Now the attorney hired by the insurance company says it should be settled because there are some problems with the appraisal, which I know he is right. This appraisal was done by one of my employees and he had not been appraising for long when he did this report. Although I did look it over, maybe I could have spent more time on it. My attorney says I have to pay the $2,500 deductible to help get the case settled. I understand that settlement is the way to go but that is not my problem since I did not even do the appraisal. I told the attorney to get the deductible from the other appraiser but he said I have to pay. Is that right?"

A: Your attorney is right. The insurance company made a contract with you and your company. They have been paying the attorney to defend you and they will pay the settlement amount that is agreed to. They are doing what they have to do under the terms of the contract. Now you have to do your part and pay the deductible. The insurance company does not have any agreements with your employee. The agreement is with you. If you "breach" your contract the insurance company could refuse to pay the settlement. I realize it will not help you in this matter, but in the future, you might want to deal with this situation when you hire a new employee. Perhaps you might have them sign a contract saying if the company gets sued over an appraisal done by that appraiser, he will reimburse you for the deductible amount. Just remember that any such agreement would be between you and your employee. The insurance contract is still an agreement between you and the carrier, so don't expect them to go after the employee to get your money back..


Would you like Claudia to manage your liability concerns?