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Ever Sue An Insurance Company?

Discussion in 'Commercial Snow Removal' started by northernsweeper, Nov 1, 2010.

  1. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    My insurance company (now ex.) received a claim notice, because of a slip and fall, at a big box I service, where I accept that liability. They talked to the claimant, then sent a letter to the national I was working for, denying my liability, based on their investigation.( a phone call )
    By them denying my liability, they voided my contract with the national, which then with held a large sum of money, they still owe me. The insurance company, 2 days later, dropped me. Their reason was "loss dec.08", even though no suit has been filed, and THEY denied my liability. Also, them dropping me, put me in a risk pool, which doubled my rates. Because of them denying my liability, the case automatically goes to arbitration.
    Before arbitration, I re-signed to service the big box again, this season. I get a call from an attorney in New Jersey. He informs me, he has been hired to represent me, at this arbitration hearing, by my EX insurance company. He also asks if I would be interested in sueing, both the big box I service, and my insurance agent, because perhaps they were both negligent, in all this. I said absolutely not. Why would I want to sue, the only decent parties, in the bunch?
    The attorney tells me to send invoices due me from the national. I didn't want to lose this contract, but had been begging for my money since March, without any luck. I had hoped re-signing would give me some leverage to get paid. It did not. About a week after arbitration, the attorney finally gets back to me. He tells me that they may have found something in my contract, that they can use against the national. I told him, great, I'm happy for you. To bad the national called and emailed, termination of any of my services 3 days before.
    Wouldn't you think, that after all is said and done, bankruptcy is filed, and I have lost everything, that someone should be held accountable? Is it just me, or should it be the insurance company?
  2. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Northern, tough spot to be in but I can't imagine why you would want to resign with them? maybe after they make good on the $ owed you but not before. can I ask why you chose bankruptcy? were you owed that much $ from this one account that put you in this spot? What type of case is the lawyer suggesting? These damn lawyers moto are sue everyone and see what sticks. Good luck to you!
  3. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    Mick, It really wasn't a bad paying contract. A lot of b.s. went with it, but it was almost 35% of my income last year. Rather than growing my sweep business this year, the loss of the money kept me back on repairs and parts, which is more lost income. It kind of feeds on itself once it gets going.
  4. bhmjwp

    bhmjwp Senior Member
    from kcmo
    Messages: 309

    I may be pr oven wrong, and please do so if I am. But after several discussions with my Ins. broker and the Insurance co. I have been told that no insurance I can buy will pay for an incident that they feel I am not liable for. If I am sued they will defend me and only then if I lose will consideration be give to cover the loss.

    This is why I would never accept a contract that holds me solely liable for all claims. It may well be to the benefit to the mgnt. co. or owner-but you can not buy ins. to cover that. But if you sign a contract that agrees to that stipulation-you are self insuring and agree to having funds withheld to cover the expenses that the mgnt. co, may bill you for.

    Now to me, this is a scam to take advantage of the small guy. It cost me as little as $50 to have my attoreny review a contract. Usually $200 to have him rewrite it and settle the differences.
  5. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I may be missing something, but you said they withheld a large sum last year - you resigned in hopes that would get you leverage for payment. It didn't AND you didn't get paid for this year. Now you're saying it really wasn't a bad paying contract? What was good about it?

    Oh, and that quote was to "Mick76", not me.
  6. Mass-hole

    Mass-hole Member
    from Boston
    Messages: 35

    The short answer is you can sue anyone, whether you've got the money to prosecute the suit, and whether the suit will be successful is different.

    I'm assuming that them is the insurance company, the first and second they is the national maintenance firm. You need to read your contract to see under what conditions the maintenance firm may withhold payments.

    Insurance is regulated at the state level, and you should talk with an attorney admitted to the bar in your state to determine whether or not the insurance company is able to drop coverage for a claim in which it denied liability. Also, negligence and liability are different. The insurance company can find you negligent without finding you liable. (i.e. the person did slip due to ice which you failed to treat, but the slip and fall resulted in no injury)

    It sounds like the insurance company may not have denied liability for the claim, or even that you were negligent so much as the insurance company didn't settle the claim for whatever reason (i.e. the insurance company didn't agree with the damage demands of the slip and fall victim, it could be your state has a rather high reasonable care for a person's own safety standard which plaintiffs need to meet in order to recover). This would explain why you were dropped/ put in a higher rate group.

    I'd find out what sort of claim this attorney thinks you have against either party. Then talk with a local lawyer. You're faith in either party may not be well placed.

    Best of luck this season.

    PS Please don't use pronouns to describe different parties in the same sentence. It's really a pain to figure out what you mean.
  7. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    Hey Mick. Sorry about the mix up with you and 76. What I mean by good contract is that it paid the bills. Yes money was tough to get more often than not, but was always nice, when it was received, though a person could do without all the phone calls for service, whether needed or not..........also sorry about the pronoun usage.
  8. Advantage

    Advantage Senior Member
    Messages: 766

    That is a rough position to be in. What reason are they giving to withhold money for services rendered?
  9. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    If I were in your position & I was truly going to end up in bankrupcy, contact several attorneys. I would also have written off that "big box" as a client with them oweing me $$$, I wouldn't of resigned them as a client. The only way it would give you leverage is to with hold services in the middle of winter, but by then they'll owe you not only from last year but this season as well.
    First have a collection attorney get working on what is owed, mine is very good, & will work on a commision of what is collected. Second get an opion on what is actually going on with your insurance, claim etc. Attorneys specialize just like Dr's, find the "expert" in what you need done, or you don't get good results, from my experience.
  10. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    Sounds like your insurance company threw in the towel.

    People sue medical insurance companies all the time for denying claims as soon as the going gets tough; it sounds as though your situation is no different. They should have defended you.

    As far as withholding your payment... Just to look at it from both sides of the coin, if the Mgmt company had to handle your claim financially, perhaps it is justified to withhold your payment? Just throwing that out there, noting full and well that it wasn't your fault your insurance company left you by the side of the road. But they don't owe anyone else and must defend their client.
  11. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    Yes, its a mess. I have filed a complaint with the attorney generals office in Mn. against the insurance company. Received a real nice letter, telling me I was dropped because of contract language, rather than a loss, and there was nothing they could do. I filed a complaint with the attorney generals office in Penn. for lost wages. They also sent a letter, saying there is nothing they can do because I am a contractor.
    As I said, I re-signed the contract for this winter, but told them during the pre season walk through, that I wouldn't drop a blade, until I was paid. I have talked to a couple of attorney's in Minneapolis. Both said it would wind up costing most of what I am owed, since it would be dealt with, out of state. I checked on a mechanics lein, but no can do here where I live.
    It is a learning process. Thanks guys, for all the imput.
  12. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    Hey Mick, I'm back

    Now to the current problem:

    First get a lawyer involved in insurance coverage involved in this matter. Find out why the coverage was denied. It sounds like they didn't know at the insurance company that you snow plow. Your broker may or may not have known. Having Business (liability) insurance doesn't mean you can snow plow automatically. You have to tell them you are snow plowing. Did your broker know? Did your broker tell your insurance company about snow plowing? This is only one reason that they could deny coverage. Is your driving record a little 'colourful'? There are hundreds more reasons that they could deny coverage. Find out why you were denied. They didn't disallow the claim, they disallowed (cancelled) the insurance policy. The national found out you don't have a valid insurance policy and cancelled you. The slip and fall claim is something else entirely.

    Once every other insurer finds out that you are 'undesirable' you are blacklisted. At first glance, you did something to 'piss-off' your insurer, find out what is was. They will tell you. 'Contract language' is not a reason
  13. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    I was dropped,according to the attorney generals office, because of contract language. The insurance company knew I plowed snow. Plowing and sweeping is all I do. They are very aware of it. my driving record is spotless. I should say, they didn't drop me on the spot. My policy was up for renewal, and they simply refused to renew. So 2 weeks later I had to find a new carrier.
    My whole point in all of this, is did the insurance company have a right to deny my liability, based on one phone call. There are cameras all over at the big box, which will show exactly where and when the claimant fell. The downside is, the only way anyone can see the video is by subpeona. Not until a claim was filed, did the insurance company care about what was in my contract. There was a paragraph that had to be added for the national, and that was never a problem. I had the same carrier for 5 years before this.
  14. dirtybird

    dirtybird Junior Member
    from 02347
    Messages: 20

    That's the problem, the National's contract transfers all liability to you in a very ironclad way. Multiple CG forms and wording in the cert. You are not getting the contract if you don't accept the insurance requirements. Period. I say good on the Insurance company for fighting the claim. I had a completely bogus STF claim last year and the insurance company paid the guy $20,000 in weeks and increased my policy guess what $22,000 a month later. Almost enough to make you go postal. :D I'm kidding of course but if that guy was to die in a house fire, I wouldn't be too upset.
  15. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    Your use of the term 'deny my liability' is confusing They can deny coverage, they can deny a claim against a policy, but they can't deny that you are 'responsible', that you are liable. Liability is a responsibility. An insurer can cover you if you are liable, but they can't deny that you are liable. (Sort of, a plow doesn't make the snow fall. The snow falls and the plow takes care of it) They can deny their liability. How is the term my in the phrase?
  16. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    The insurance company did their investigation and determined I wasn't liable.. I suppose by my not being liable, then they,in turn, aren't liable either.
  17. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    The insurer can deny liability, that does not mean that is the end of it. The injuried party may sue after that.
    So if there is no liability and the policy wasn't cancelled but it was lapsed at renewal. then you had coverage for the incident, and they would be obliged to defend a claim if it arose. This doesn't explain why the national would withhold payment. Was the renewal date during the snow plowing season (Nov to Apr)? Did your broker find you another insurer before the coverage lapsed? ( that's what they are supposed to do, It's part of their job, so you have seamless coverage) Is that what the 'nice' broker did wrong? Were you without insurance coverage for any length of time?
  18. Mdirrigation

    Mdirrigation Senior Member
    Messages: 413

    First if the national doesnt pay , get your accountant to issue them a 1099 for the amount owed plus intrest and expenses , now you may use this as a deduction just like you paid them out of your pocket , they now have to file an amended return and claim the amount they didnt pay you as income .
    Then you can still sue them for the money ,and file a mechanics lien against the property you were plowing . If the business is a renter or leases the building you still file the lien , it goes against the property owner , when this happens the property owner will then contact the business and make them pay up .
  19. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    \ Heather,
    Believe me, I am aware its not the end of it. Yes, I realize there can, and probably will be, a suit filed, at some point. No, I never had a lapse in coverage. My agent did find me another carrier, at twice the cost, but I made sure they had a copy of my contract, before I took the policy.My coverage has never lapsed. Yes they are obligated for coverage of the incident. The problem is, they want someone else to shoulder part of the liability, and they don't much care who it is, or who gets run over in the process. By them denying my liability to the national, they voided my contract, which states all will be held free from indemnity/liability etc. By them doing that, the national is hanging onto my money to cover their and the big box legal fees, in case somehow the insurance company can weasel out of it. And the "nice" broker has been a good agent, and I don't mind saying so. With everyone out to cut your throat at first chance, it is a nice change to have decent people to deal with.
    To extend the story out further, I was called by the attorney, the insurance company hired for me. The arbitration has been put off until the end of November. I also received a letter saying I would be required to be there, in Philly. I know I can not expect a dime, at least until after the arbitration, if then. The tricky part will be servicing existing accounts while I am gone.

    No mechanics lein in my state for snow removal work.

    Again, thanks for all the imput, I will let you all know how it turns out.
  20. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    The question now remains. Who did something wrong? Did you do 'something stupid' (negligent) or was it the owner of the property, (like a broken step or a pothole) that the property owner is responsible for, or was the plantiff simply too clumsy for their own good.

    Does the national have a 'HOLD HARMLESS' agreement from your insurer? They are commonly allowed at the request of the insured (you) for the benefit of the prime contractor (the national). This puts the national in the same stead as you, neither of you are liable according to the insurer.

    I don't think the national has any 'right' to hold onto the money owed, BUT they got it and they ain't lettin' go of it!!

    Who did the insurer deny liability to, the injured party or the national?

    Put in to have the jurisdiction changed to 'where it occured' That will screww 'em up!!
    Last edited: Nov 3, 2010