Litigation is expensive and the cost of pursuing your rights in court are all too frequently pyrrhic. Consider the plight of an employee who is forced to sue his or her insurance company because it refuses to pay for certain medical costs due to a dispute over whether hospital procedures are covered by its insurance policy. After a long and time-consuming legal battle, even if the employee ultimately wins, the attorney fees incurred along the way may equal or even dwarf the recovery.
The same can be said of a contractor who is forced to sue its insurance carrier because it refuses to defend and indemnify the contractor against water damage claims that arose during a construction project. While the contractor contends the water damage was a covered “occurrence” under its comprehensive general liability policy, the carrier disagrees and litigation ensues to determine what is (and is not) covered. At the end of the day, even if the contractor prevails, the contractor will never be made whole and in retrospect, perhaps the contractor’s dollars would have been better spent trying to settle directly with the building owner rather than fighting it out with its insurance carrier.
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