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Reducing Risks Without Lawyers

“The first thing we do, let’s kill all of the lawyers.”  This phrase from Shakespeare’s King Henry VI has been used in modern times to express contempt for lawyers.  Dick the Butcher in Shakespeare’s play, however, spoke this phrase in the context of exterminating lawyers in order to create chaos, tyranny and anarchy, not making the world a better place.

Undoubtedly, most people’s first experience with a lawyer results from encountering a problem that cannot be resolved without legal services.  Facing such a problem, they find themselves in a “no-win” situation because they ultimately will incur significant expense to achieve even the best results.

One way to minimize the need for expensive legal services is to obtain insurance against certain risks.  In the event of casualty losses, proper insurance coverage will cushion the burdens of having to deal with lawyers and litigation.  Preemptive insightful discussions with capable insurance agents, who can explain insurance coverage options, are very important.

Of course, anyone owning an automobile will have some experience with insurance.  Although Virginia law mandates certain minimum automobile insurance coverage (unless one pays Virginia’s uninsured motorist fee), the minimum mandated coverage today is so small that people can face significant personal exposure as a result of even a relatively minor accident. Not only is it important to have sufficient automobile liability coverage; it is also important to have uninsured motorist coverage through one’s own policy to guard against losses and damages that an uninsured or underinsured motorist can cause.

The next most common form of insurance is homeowners insurance, which not only protects against casualty losses to a home and its contents, but should also include liability coverage to protect the homeowner against claims for accidental injuries to third parties. Anybody who owns a swimming pool or domestic or wild animals should be sure to inform the insurance agent in applying for homeowner’s insurance to assure coverage for related losses.

Business owners should obtain casualty and general liability insurance, to protect business property and to guard against liability claims from third parties that may arise out of business operations.

With many types of liability insurance, insurance carriers can issue umbrella policies to cover catastrophic losses exceeding the limits of the underlying coverage.  The premiums for these umbrella policies are generally very modest because the risk of triggering umbrella coverage is typically very small.  Adding such inexpensive coverage, however, can “save the house” in the event of a catastrophic loss.

Not only will liability insurance policies cover damages payable to third parties, but they contain provisions requiring the insurance companies to retain counsel at their own expense to defend the policyholder against third-party claims.

Additionally, policyholders can insure against first-party losses, including the policyholder’s health (through health, long-term care, and disability insurance) and ultimately his or her life, through life insurance.  Such first-party insurance coverage can protect individuals and businesses against losses which, without proper planning, could result in financial ruin creating problems that only lawyers may be able to resolve.

In all cases, insurance policies are contracts between the insured and the insurer under which the insured agrees to pay a premium and the insurer, in return, provides the purchased coverage.  Unlike most other contracts, however, insurance policies are generally pre-printed and full of standard terms and conditions which the insured has little or no ability to negotiate.  It is therefore critical that policyholders review and understand all of the policy provisions in order to ascertain what is and what is not covered.  It is also important for potential policyholders to supply complete and accurate information on their applications for coverage, because those applications often become part of the contract of insurance.  In the event of a material misrepresentation in the application, the insurer may deny coverage after a loss, leaving the policyholder unexpectedly uninsured.

Likewise, it is critical for policyholders to make sure they comply with all of the requirements in the policy to give prompt notice of any loss and to cooperate with the insurer in the investigation and adjustment of a loss.  Failure to comply with the various requirements in the policy after a loss can jeopardize insurance coverage.

Although it is not possible to insure against every potential risk, insurance is available for many risks.  With the input of capable insurance professionals, insurance coverage can shift risks away from individuals and businesses and onto insurance companies, with a concomitant reduction in the disruption of the individual’s life or the business’s operations.  Proper insurance planning will not only reduce the risk of personal loss, but will have the additional benefit of reducing the desire to kill all of the lawyers.

Bob Ziogas is an attorney with Glenn Feldmann Darby & Goodlatte – visit to learn more.

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