An insurance policy is a contract between you and your insurance company that protects you in two important ways. The policy will pay for your loss if your home is accidentally damaged by fire or by water pipes bursting. It will also pay for a lawyer to defend you if you are sued for a peril that is covered under your policy, such as a slip and fall on your property.
If you are a tradesman with negligence insurance, your insurance company will also pay for a lawyer if, for example, you are sued because the roof of the building you worked on collapsed. In construction litigation, many trades are named as defendants but not all may be found to be negligent by the courts. Even if you think that you were not negligent, you must defend the lawsuit and the expense of a lawyer, which can be costly in this kind of litigation, will be paid by your insurance company.
An insurance company may refuse to pay for a loss or refuse to defend you on the basis that you were not insured for the peril. For example, your homeowner’s policy may not cover you if you are running a business from your home and your customer slips and falls on your property. Where there is a refusal to cover you, you should consider suing your insurance company to dispute the policy. You must commence your lawsuit within one year after the loss occurs.