What Happens When You Have to Pay a Plaintiff More Than Your Insurance Policy Will Pay?

What defendants can do when their counsel worries more about maintaining the business of the insurance company that refers them cases, than the clients they are assigned to represent?

You rely upon your defense attorney. They are confident they will win at trial. You have limited, or no conversations with the insurance adjuster making payment decisions behind the scenes. Then, you go to trial and a jury finds that you are responsible for paying the plaintiff more money than is available under your insurance policy. You are now personally responsible for repaying the plaintiff all amounts greater than your policy limits. Options: Bankruptcy? Sell your property? Beg a family member to pay the bill? All are less than desirable.

Some defense counsel believe they are invincible. So confident that they will win,  they don’t adequately explain the likelihood that you could become personally liable for a verdict. Some insurance companies put their own interests above their insured. Combining the invincible attorney with an insurance company adjuster who fails to recommend a settlement, despite analysis that available policy limits will not be adequate to cover a verdict, is a recipe for disaster. This can be devastating to you.

In this example, you may have an opportunity to assign your right to sue for bad faith to the plaintiff that you owe.  The plaintiff would be permitted to sue your insurance company for the bad faith handling of your defense, for failing to pay a pre-suit settlement to the plaintiff and for failing to protect you from personal liability after trial. An assignment such as this allows you to rest easy that no one will be placing liens on your property; and it also provides an opportunity for our clients to collect the full amount of the judgments they are awarded at their personal injury trials.

Attorneys at Murphy & Landon have pursued personal injury and medical malpractice claims against defendants put in this position by their representatives. Murphy & Landon has won excess verdicts at trial and has successfully sued insurance companies for bad faith, resulting in payment of the full amount of the outstanding verdict, in addition to interest and punitive damages.