March 2, 2024

Being accused of injuring someone or damaging someone’s property can cause overwhelming stress, increased anxiety, and sometimes outright panic. Frequently, there is also some amount of anger present. Questions start racing through your mind. Will I lose my house? I didn’t do this, or more often, I did not mean to do this – and I’m not related to any lawyers – how do I get out of this? This person is a known scam artist; if I just ignore this, will they go away?

First, take a deep breath. Relax. The million-dollar McDonald’s hot coffee verdict was news because it was unusual. Just because you’ve been sued doesn’t mean your financial future is ruined. If you are like most of us, you’ve likely been paying a monthly or yearly premium to an automobile insurer, a homeowner’s insurer or, if you’re in business, a business owner’s insurer. Your insurer is experienced with situations like the one you are now experiencing, even if this has never happened to you before.

Second, don’t destroy anything. If you think an e-mail, document, photograph, video, or some other item is incriminating or otherwise unhelpful, the instinct may be to get rid of it. Don’t. First, know that because you now know you’re being sued, destroying the document, photograph or other item probably will not help and may make your situation worse. Second, your insurer may be hiring a lawyer for you shortly, and she or he is going to want to assess that item. It may turn out to the be the most important item of your defense.

If you have a personal or family lawyer, contact them. They will help you contact your insurer, which is described in the next step, below. Send the lawyer everything the other party or their lawyer sent you. If you are in business and you only received a letter not a lawsuit, but the letter references some consumer protection statute (in Massachusetts that would likely be Massachusetts General Law ch. 93A), make sure that letter gets to a lawyer as soon as possible. Do not call the person who is suing or threatening to sue you. You don’t want your words used against you later. It’s probably not going to help you to call their lawyer, either, even if they invite you too.

If you don’t have a family lawyer, no problem. Your insurer may be hiring one for you shortly.

Next, call your insurer or your insurance agent right away and report the claim. Complete whatever paperwork they ask you to complete. Given them everything the other party sent to you. If your insurance company asks for anything else, provide it. If they call you, call them back. Somewhere in your insurance policy is a section that looks something like this:

C. Duties After “Occurrence.”
In case of an “occurrence”, you or another “insured” will perform the following duties that apply. We have no duty to provide coverage under this policy if your failure to comply with the following duties is prejudicial to us. You will help us by seeing that these duties are performed:

  1. Give written notice to us or our agent as soon as is practical, which sets forth: a. The identity of the policy and the “named insured” shown in the Declarations; b. Reasonably available information on the time, place and circumstances of the “occurrence”; and c. Names and addresses of any claimants and witnesses;
  2. Cooperate with us in the investigation, settlement or defense of any claim or suit;
  3. Promptly forward to us every notice, demand, summons or other process relating to the “occurrence”;
  4. At our request, help us: a. To make settlement; b. To enforce any right of contribution or indemnity against any person or organization who may be liable to an “insured”; c. With the conduct of suits and attend hearings and trials; and d. To secure and give evidence and obtain the attendance of witnesses;
  5. With respect to C. Damage To Property Of Others under Section II – Additional Coverage, submit to us within 60 days after the loss, a sworn statement of loss and show the damaged property, if in an “insured’s” control;
  6. No “insured” shall, except at such “insured’s” own cost, voluntarily make payment, assume obligation or incur expense other than for first aid to others at the time of the “bodily injury.”

I know the policy as a whole may seem hard to read at points, especially when you get to the part that talks about whether your hovercraft is covered or not covered, but when or if you do read the policy, you will see there are specific things you must do and specific things your insurance company must do. (As an aside, who owns a hovercraft?)  The above section says that you will cooperate with your insurer in the defense of the claim. If you don’t cooperate, you risk losing the benefits of the insurance policy you paid the premium for all those years. So, cooperate.

What Happens Next?

If the thing your being sued for is a covered claim, called an “occurrence” in your policy, your insurer has agreed, under the terms of the insurance policy, to both indemnify you and provide you with a defense. Indemnify means to pay any amounts you become legally obligated to pay as the result of an occurrence, up to the limits of your policy. To satisfy the defense obligation, the insurance company will hire you a lawyer, who will send his or her bill to the insurance company. Even though the insurance company pays the bill, the lawyer’s obligation is to you – to zealously defend you against the other parties’ claims.

Then, cooperate with the lawyer and the insurance company. You should be able to work as a team to protect your interests against the claims of the other party.

If you don’t have insurance, of if your insurance company says you don’t have coverage for a particular claim, you will need to find your own lawyer. Shop around for a lawyer who understands the law as it pertains to the claims against you and with whom you feel comfortable. There are thousands of lawyers in Massachusetts alone. You have lots of choices. Check with friends and family for the names and contact information of lawyers they trust. If I can help you, please feel free to give me a call.

Recap

If you are sued, or you think you’re about to be sued:

  1. Collect all the information you have about the lawsuit in one place;
  2. Notify your insurance company and your family lawyer, if you have one;
  3. Cooperate with the insurance company and provide them with all the information you collected in step one;
  4. Work with the lawyer the insurance company assigns to represent you – they are on your side.

Being sued is no fun, but it doesn’t have to be traumatic.

The information in this article is not legal advice and you should not rely on it as such. The specific facts of each situation can result in vastly different outcomes from one case to another. If you have questions about this area of the law, and how it may apply to your specific circumstance, please consult with a lawyer. I would be happy to discuss specific questions with you and you should feel free to contact me. 

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