Should We Notify Our Insurance Company?

On March 28, 2018, a federal judge in Atlanta excused Fulton County’s insurance company from paying more than $6.5 million. Valuable insurance coverage was lost because the County failed to provide timely notice to its liability insurance company.

Insurance policies are contracts between the insurance company and the insured. Those contracts require the insured to take various actions after an accident. Two of the most important are to give the insurance company notice of an accident and to send any potentially covered lawsuit to the insurance company. Coverage may be lost if the insurance company has included language in the policy stating that a failure to provide notice will result in a forfeiture of coverage or that the notice provision is a condition precedent to coverage. Put more simply, late notice may excuse the insurance company from paying, as it did Fulton County’s insurance company.

The notice clauses enable insurance companies to promptly learn of the accident so they may investigate the circumstances, determine whether it is prudent to participate in negotiations, or, if negotiations are not successful, to ensure the lawsuit is properly defended. Courts recognize the importance of prompt notice and will enforce clearly stated consequences of late notice.

The insured’s duties and the consequences of the insured’s failure to give prompt notice depend on the nature of the coverage, the language of the policy, and the law of the state whose statutes and cases are used to construe the policy. Insurance policies may be personal or commercial, they may be “first party” or “third party.” They may be “occurrence” or “claims made.” They may be “primary” or “excess.” These variations are critical but are beyond the scope of this brief article.

Here, we focus on a few of the principles common to almost all insurance contracts. For example, liability policies require that notice of an occurrence (an event that could give rise to a claim) be given to the insurance company “immediately” or “promptly” or “as soon as practicable.” In addition, most policies require the insured to notify the insurance company if a claim is made or, if suit is brought, to forward the suit papers to the insurance company. A typical notice provision follows:

Duties In The Event Of Occurrence, Offense, Claim Or Suit

a. You must see to it that we are notified as soon as practicable of an “occurrence” or an offense which may result in a claim. To the extent possible, notice should include:

(1) How, when and where the “occurrence” or offense took place;

(2) The names and addresses of any injured persons and witnesses; and

(3)  he nature and location of any injury or damage arising out of the “occurrence” or offense.

b. If a claim is made or “suit” is brought against any insured, you must:

(1)  Immediately record the specifics of the claim or “suit”’ and the date received; and

(2)  Notify us as soon as practicable.

You must see to it that we receive written notice of the claim or “suit” as soon as practicable.

As indicated by this language, policies generally impose two duties: (1) a duty to notify the insurance company of an incident, accident, occurrence, or claim; and (2) an independent duty to notify the insurance company of a lawsuit.

The duty to give notice of an incident, accident, occurrence, or claim arises when the insured has reason to know of the possibility of a claim, regardless of whether the insured believes that he or she is liable, or that the claim is valid. Under Georgia law, the duty to provide notice to an insurance company is triggered when an insured actually knew or should have known of a possibility that it might be held liable for the occurrence.

In determining if there is a possibility of a claim that should be reported to the insurance company, a prudent insured will consider, for example: whether the insured is aware a person is injured; whether the insured is aware the injuries require treatment; and whether the insured is aware of the extent of related damage to property such as a vehicle (suggesting the severity of the collision).

Even Short Delays Can Avoid Coverage
Under Georgia law, while the “as soon as practicable” language affords some leeway as to timing, courts applying Georgia law have held that short delays can nonetheless result in the loss of coverage. Where no valid excuse exists, the failure to give notice for a period as short as three months has been found to be unreasonable.

Late Notice May Result In Loss Of Coverage
If an insured unreasonably fails to give timely notice, the insurance company is not obligated to provide either a defense or coverage:

  • An insured’s own determination of its lack of liability is not an excuse. The insured may not justify failure to provide notice by claiming that it determined that it had no liability for the incident.
  • The insured’s duty to give notice arises upon actual knowledge of a claim; however, the insured’s duty may also arise in the absence of actual knowledge. The insurance company – and then a court – will look at all of the facts and circumstances to determine whether the insured had enough information that he or she “should have known” a claim was possible. For example, where insured heard that someone had fallen from a fire escape and that someone was observed taking photographs of the scene, it was unreasonable for insured to delay five months before giving notice.

Similarly, a failure to promptly forward suit papers may result in loss of coverage:

  • The failure of an insured to forward a complaint to an insurance company until 46 days after its receipt breached a provision of a policy requiring prompt forwarding of suit papers, and allowed the insurance company to avoid both of its obligations – to defend the suit and to pay for any resulting judgment.

The policy language is critical. Where notice to the insured is not a condition precedent to coverage, the insurance company may void coverage only if the insurance company is able to show that it was prejudiced by the late notice. On the other hand, where the policy language indicates timely notice is a condition precedent, Georgia cases hold that the insurance company  need not prove that it was prejudiced by the delay.

Some types of insurance have their own, specific rules. For motor vehicle insurance, an insurance company seeking to avoid coverage due to late notice bears the burden of showing both that the delay by the insured was unreasonable and that this unreasonable delay prejudiced the insurance company’s ability to defend the case.

Giving Notice to the Insurance Company
Insureds should carefully read the policy and strictly comply with the notice requirements of the policy, both as to whom notice should be sent and the manner in which it should be sent.

Who May Give Notice?
Usually, the insured gives notice of a claim or sends copies of a lawsuit directly to the insurance company, Georgia law does not require that notice come only from the insured. Anyone who follows the policy language may give notice, as long as reasonable and timely.

Indeed, with respect to motor vehicle insurance, Georgia statutes specifically provide that a copy of a complaint and summons may be sent by a third party to the insurance company or to the insurance company’s agent by certified mail or statutory overnight delivery within ten days of the filing of the complaint.

To Whom Should Notice Be Given?
It is always safest to notify the insurance company directly, at the place indicated in the policy.

An insured may be accustomed to working with an independent insurance agent for most of their “day-to-day” insurance-related dealings. However, an insured should be aware that giving notice to an independent agent likely does not constitute valid notice to the insurance company. Under Georgia law, independent insurance agents or brokers are generally considered the agent of the insured, not of the insurance company.

However, under limited circumstances, an independent insurance agent may be considered an agent of the insurance company, such that notice to the agent is considered notice to the insurance company itself. For example, an independent insurance agent may be considered an agent of the insurance company if the insured can prove that the insurance company granted the agent or broker authority to bind coverage on the insurance company’s behalf. Alternatively, if an insurance company holds out an independent agent as its agent and an insured justifiably relies on such representation, the independent agent will be considered the agent of the insurance company. The insured will bear the burden of proving that the independent insurance agent is an agent of the insurance company. Gathering and presenting this evidence is expensive and time-consuming but may help to save coverage.

Late Notice May Be Excused
Not every late notice results in a loss of coverage. There are some circumstances in which courts have come to the rescue of insureds when the insurance company has denied the claim because of “late notice.” The insured has the burden of showing justification for a delay in providing notice. Some examples from Georgia cases include:

  • Even though 19 months elapsed before the insured gave notice, the court properly let a jury determine whether the insured acted reasonably where the insured had no actual knowledge of an accident, there were no facts to show the insured should have known, and the insured notified the insurance company immediately when evidence of a claim came to its attention.
  • Even though the insured was aware of an accident, its late notice may be excused because no one appeared to be injured in the accident and there was no significant property damage.

Gathering and presenting evidence that the insured’s delay was excusable under the circumstances is expensive and time-consuming but presenting and proving the grounds for an excuse may prevent the insurance company from denying coverage.

Call Your Lawyer, Provide Notice To The Insurance Company, And Forward Suit Papers
Whenever the insured is aware of an occurrence or a potential claim, the insured must promptly review the language of the applicable policy. The insured should not speculate there is no liability. Neither should the insured speculate there is no coverage. The insured should give notice even if the insured is unsure if the policy provides coverage.

Similarly, the insured must not assume that things can be “worked out” with the other party without involving the insurance company. An insured must not fail to give notice just because it believes the it has no liability or that the claimant or some other party was at fault. The other party or the other party’s insurance company may not agree.

The rules are complex, and the inquiry is very fact-specific. As the Georgia Court of Appeals recently stated:

We recognize that our jurisprudence on the question of what constitutes sufficiently prompt notice under an insurance contract … is not easily harmonized. Indeed, some of our prior decisions are difficult to reconcile with each other, as is not uncommon in an area that calls for a fact-specific inquiry.

In other words, call an experienced lawyer.

Because the consequences of failing to comply with the terms of an insurance policy could be fatal to coverage, a person or a business who becomes aware of an occurrence, or who receives a claim, demand letter, or lawsuit, should seek legal counsel as soon as possible. Ask about the specific rules applicable to the kind of policy at issue, about the details of when, by whom, and to whom notice must be given, and about the law of the state whose law will be used to construe the policy. And if the insured has failed to give prompt notice of an occurrence or claim, or to forward suit papers, the insured must consult a lawyer immediately to see if the delay may be  excused so that the insured is not left facing liability without insurance coverage.

If we may be of assistance, contact Mike Reeves at or (770) 399-9500.

I Thought My Insurance Would Cover This. What’s This Letter From The Insurance Company?

You buy insurance to protect your business (or you, personally) from claims. When a claim is covered by the terms of the policy, insurers have two separate duties: (1) to defend you; and (2) to pay damages. If there is an accident, you expect your insurer will perform these duties: hire a lawyer to defend you and pay lawfully proven damages, if any.

You become aware someone has been injured on your property, or claims your product has caused harm, or was injured in an accident with one of your employees. You notify your insurer and believe the claim will be handled. Then, you receive a letter from your insurer, indicating the insurer is investigating the claim and will hire a lawyer to defend you—but that it is reserving its right to change its mind—meaning that it can decide later to stop paying the lawyer or to refuse to pay the claim. You have received a “Reservation of Rights” letter (“ROR” letter ).


“ROR” letters are often long and complicated. They recite facts, contain excerpts of policy language, and state the insurer’s contentions. Although reading it and understanding it may be challenging, you should not ignore a ROR letter.

If you do not respond to the insurer’s letter, your lack of response will be taken as an implied agreement to the insurer’s contentions, as well as your acceptance of the services of the lawyer hired by the insurer under whatever terms the insurer outlines in the ROR letter. Furthermore, the letter may ask you to provide more specific information to aid the insurer’s investigation. Such cooperation is required under the insurance policy and requests should be responded to promptly.

Instead, you will want to have your attorney review the ROR letter, the policy, and the facts of the claim.  Based on that review, your attorney can advise you how to best respond to the ROR letter, including:

  • challenging any unsupported or incorrect assertions;
  • seeking withdrawal of the reservations;
  • negotiating a non-waiver agreement; and/or
  • initiating or defending coverage litigation.


There are certain requirements for an effective reservation of rights.

First, the ROR letter must “fairly inform” you of the insurer’s position and the specific basis for the insurer’s reservations about its coverage. The language of the ROR letter must be unambiguous. If it is ambiguous, the letter will be construed strictly against the insurer and liberally in your favor. A well-written ROR letter should tie the facts to the cited policy provisions and explain why the insurer believes those facts and policy provisions may result in no coverage.

Some issues affecting coverage may be known from the outset of a claim, e.g., the insured’s failure to give the insurer timely notice of the claim. Possible defenses based on issues known to the insurer should be listed and explained in the ROR letter. The insurer’s failure to list specific defenses it intends to assert may result in a waiver of the insurer’s defenses. However, other defenses to coverage may arise as the evidence is developed, e.g., where there is an exclusion in the policy and facts are learned later that support the exclusion. An insurer is afforded some time to investigate and analyze the circumstances before being required to provide the full basis for its coverage position. If those facts are not known at the outset of a claim and are learned later, the insurer may send a new or amended ROR letter.

Waivers of the insurer’s defenses are uncommon and even disfavored under Georgia law; however, arguing for a waiver can be highly important to you. If the insurer has waived its coverage defenses, you may be entitled to payment of all of your attorney’s fees and full payment of claims, up to the dollar amount of coverage you purchased.

In addition, you and your attorney should carefully review a ROR letter to:

  • determine if the ROR letter is timely;
  • verify that the dates, coverage amounts, and facts recited in the letter are accurate;
  • compare the policy language in the letter to your policy, assuring the language is the same and noting errors or incomplete selections;
  • determine if the insurer is reserving its rights to deny coverage of the entire claim or just a part;
  • determine if the same facts would be used to determine your liability for damages and the coverage issues; and
  • look to see if the insurer is claiming the right to make you reimburse it for the fees of the lawyer it hired to defend you.

You May Have a Right to Your Own Independent Counsel.

Most insurance policies allow the insurer to control the defense of the case and to select the attorney to defend the case. The lawyer hired by the insurance company is deemed to have an attorney-client relationship with both the insured and the insurer. Usually, joint representation of both the insured and the insurer is not a problem because the interests of the insured and the insurer are aligned. However, when the insurer defends and retains counsel under a ROR letter, the interests of the insured and the insurer may differ. If the differences between the interests of the insured and the insurer are: significant (not merely theoretical) and, actual (not merely potential), the insurer may have an obligation to pay for “independent counsel” to represent you, the insured. Under those circumstances, independent counsel is usually the attorney who normally represents your business or you, individually.

In addition, where the insurer chooses the lawyer to represent you, that lawyer may have an on-going business relationship with the insurer—which may result in a potential conflict of interest for that lawyer. The lawyer’s desire to receive additional work from the insurer may result in a conscious or subconscious steering of the claims to benefit the insurer rather than you, the insured —especially if there are truly conflicting interests. For example:

  • Where there are multiple claims, some potentially covered and some potentially non-covered, the lawyer retained by the insurer may consciously or subconsciously conduct the investigation and development of the evidence in a way that makes it more likely that the jury’s verdict would award damages on the non-covered claims rather than those claims for which the insurer is obligated to provide coverage.
  • If the policy excludes coverage arising from certain conduct and the insurer reserves the right to disclaim coverage based on whether that conduct occurs, there is a conflict of interest: you will want to show that any legitimate damages resulted from covered acts and the insurer will want to show that damages arise from your acts within the exclusion.

Where there is the potential for such a conflict of interest, some courts have ruled that the insurer must pay for independent counsel selected by the insured to handle the defense. Those courts recognize that the lawyer retained by the insurer cannot represent truly serious conflicting interests. The ultimate question is whether, under the facts and circumstances of a particular claim, the insurer’s reservation of rights renders it impossible for counsel selected by the insurer to defend both the interests of the insurer and those of its insured.

If the ROR letter creates a serious and actual conflict between your interests and those of the insurance company, you should ask the insurer to provide independent counsel. In Georgia, the independent counsel issue is not fully resolved. In 1963, a Georgia court held that attorneys, whether or not paid by insurance companies, owe their primary obligation to the insured they are employed to defend (i.e., you, not the insurance company). In 1989, a federal court held that the insurer must choose between denying a defense to the insured or providing a defense in cooperation with counsel retained by the insured and paid for by the insurer.

The ROR Letter May Contain a Requirement that You Reimburse Defense Costs.

The ROR letter may assert that you will be required to reimburse the insurer for attorney’s fees and other defense costs if it later determines there is no coverage. Your insurance policy may already obligate you to do this—however, if it does not and you fail to object to this requirement when presented in the ROR letter, the insurer will argue that your failure to object constituted a new agreement to reimburse the insurer for these fees and costs.


Once you have reviewed the ROR letter, you should respond to the insurer in a timely manner. Your silence could be used against you. The response should:

  • state that you are reserving all of your rights under the policy;
  • state that you will cooperate and will provide the information the insurer requested to the attorney the insurer retained to defend you;
  • correct any errors as to dates or facts set forth in the ROR letter;
  • identify any misquoted or omitted policy language that is beneficial to you;
  • state your disagreement with the insurer’s contentions;
  • reserve the right to hire independent counsel (at the insurer’s expense), if there is a conflict of interest; and
  • challenge the insurer’s effort to have you reimburse it for defense costs, unless that right is already given to the insurer in the policy.


If the insurer flatly denies coverage, you will have no insurance coverage for the claim you submitted to your insurer. You would need to hire a lawyer and fund the payment of any settlement or verdict. If, however, you have a good faith belief that the insurer acted wrongly in denying  coverage, you may sue the insurer, alleging a breach of the insurance contract and seeking recovery of all your losses, including all of the fees paid to defend the case, the amount of any settlement or verdict paid, and possibly the fees incurred in proving the insurer breached the contract of insurance.

If the insurer agrees to defend under a reservation of rights, but you reject the insurer’s reasoning, you and the insurer could enter into an agreement expressly stating: that the insurer is not waiving its coverage defenses; that the insured preserves its right to demand coverage; the terms under which the insurer would defend the claim (such as who controls the defense, how strategy is determined, if settlement is pursued how it would be funded); that the lawyer retained by the insurer and paid by the insurer owes loyalty only to the insured and has a duty to protect the insured’s confidential information from disclosure to the insurer; whether separate counsel is required (and, if so, how legal bills are reviewed and paid); and, the rights of the parties once the claim is resolved (e.g., whether the insurer is entitled to reimbursement of defense costs paid). This agreement is called a “Non-Waiver Agreement”.

If there is a dispute over coverage and it is not possible to enter into a non-waiver agreement, the insurer must then file a separate action, called a “Declaratory Judgment Action,” asking the judge to review the matter and declare if there is coverage for the claims. You would be a defendant in that action and would need to hire your own attorney to convince the court there is coverage.


If you receive a ROR letter, your attorney should review the ROR letter, the policy, and the facts of the claim and advise you how to best respond. If we may be of assistance, contact Mike Reeves at or (770) 399-9500.

You Have Been Served | What to Do if You Have Been Served with Legal Papers

If you are served with legal papers, you must stop normal activities and take immediate action. What you must do and when you must do it depends on a number of variables (some of which are discussed in the next paragraph). Exploration of those variables is beyond the scope of this article. Instead, this is a quick summary and checklist of issues to consider, actions to take, and the time in which those actions must be taken.

The legal papers may come from a criminal court, from a court that handles civil disputes, or from an administrative agency. The papers may be a notice of an urgent hearing seeking immediate relief, a lawsuit against you, or a subpoena requiring you to produce documents or testify. You may have been served individually, or your company may have been served. The papers may be from a federal court or a court of the state. Within the state system, there are often several levels of courts.

This summary is written from the perspective of a small to mid-size business, although many of the issues apply equally to legal papers served on individuals or on large businesses. Businesses that have received such papers before may have procedures in place to address these issues, hopefully incorporating the points made in this article.

What Legal Papers Were Served?

Notice of a Hearing: The papers may provide very short notice of a Hearing, seeking a Temporary Restraining Order or an Injunction. Such papers require immediate attention.

Summons & Complaint: The Summons is a notice from a court that a lawsuit has been commenced against you or your company. The Summons tells you the time by which you must respond. The Complaint is the statement of the other party’s claim against you or your business.

Subpoena: Even if you are not a party to a lawsuit, you may be compelled to collect information and to give testimony in a legal proceeding. You have a limited time to object to the scope of a Subpoena, to seek to narrow the collection of information, and to seek compensation for the expense of compliance.

How Were the Papers Delivered?

Sheriff or Process Server: Commonly, such papers are delivered by a Sheriff or a Process Server; however, legal papers may be validly served in other ways. Always assume that the legal papers were properly served. (Your lawyer may later determine that service was not proper and raise a defense.)

Certified Mail or Statutory Overnight Delivery: Legal papers may arrive by Certified Mail – Return Receipt Requested or by UPS, FedEx or other such method that requires you to sign for the delivery. Do not avoid service by refusing to sign or by refusing to retrieve the Certified Mail from the Post Office.

Substituted Service or Publication: There are limited circumstances under which the other side may be able to “serve” you or our company by serving the Secretary of State or by publishing a notice of the lawsuit in a County Legal Organ, which is a newspaper authorized by applicable law to publish notices of legal proceedings. Even though you may not have actually seen the legal notice, the law will treat the substituted service or publication as valid service upon you or your company.

Novel Methods: As more communication and commerce are done by electronic devices, the boundaries are being pushed. A few courts have allowed electronic service. It is not yet common; however, if you are concerned that you may have received legal papers electronically, ask your lawyer.

Who May Be Served?

Personally: The papers may be served on you, individually, or as a representative for your company. You may be served at your work, at your home, or at any place you are found.

Person with whom you reside: The papers may be properly served on an adult who resides with you.

Agent or Employee: Your business may have designated an Agent for Service of Process or service may be attempted on an employee or other agent of your company. Your Agent or employee must be aware of the issues discussed in this article.

What is the Time For Response?

Read the papers and get an idea of when action is required. Putting aside the sometimes complex rules for counting dates, generally:

Notices of Hearings seeking urgent legal relief (TROs or injunctions) typically have very short deadlines. The date will be shown in the Notice. Your first call should be to your lawyer.

Subpoenas generally specify the date for a response or compliance with the Subpoena. In addition, the Subpoena may require the filing of any Objections you may have on or before the time specified for a response. While the deadline to file an Objection is often 10 or 14 days after service, it can be earlier.

Summons & Complaint: a Summons typically states the time within which a response must be filed, generally 21 days from the date of service for proceedings in federal court and 30 days from the date of service for proceedings in Georgia courts.

What to do?

As soon as you are aware of legal papers, you should make a note of how, where, when, and by whom the papers were received. Make those notes on the papers or on some other record maintained with the original copy of the papers.

Never ignore legal papers, even if you believe they were not properly served or that the claims are groundless. If you ignore the papers, you may miss your opportunity to resist the imposition of a Temporary Restraining Order, you may lose the right to object to a Subpoena or to seek compensation for the costs of complying, or, if you ignore a Summons & Complaint, every allegation of fact will be deemed admitted and default judgment will be entered against you or your business.

Instead, contact your lawyer, your insurer, and contact the business that may have agreed to indemnify you (for example, pursuant to a contract). Failure to give notice may cause you to lose your right to contest the relief sought, lose your insurance coverage for the claims at issue, or lose your right to be indemnified.

Immediately upon service, you should collect all necessary information, e.g., the names and contact information of witnesses and identification of relevant information and documents. Once identified, you must preserve the paper files and electronic files on computers.

Who to Contact?

Your Lawyer: Service of legal papers triggers important deadlines, and action must be taken before those deadlines expire. If you do not take appropriate action within those deadlines, you lose the right to defend against the lawsuit – even if the lawsuit has no merit. You must immediately notify your lawyer about the notice, suit, or subpoena so that your lawyer can determine the important deadline dates and file the necessary responses.

In addition, you may have a claim against the person or entity that sued you or your business, called a “counterclaim.” Some such counterclaims are “compulsory” and must be made at the time when you respond to the Summons & Complaint. Discuss these with your lawyer immediately so that your lawyer is able to timely assert any compulsory counterclaims.

Insurance Carrier: Your insurance policy can be a great benefit, not only paying for any damages that may be found due but, often as importantly, paying for the cost of your defense. The insurance policy, however, has important conditions that must be met in order for the insurer to provide coverage and a defense for a given claim. Those conditions include notifying the insurer of a potential claim and immediately transmitting a copy of the legal papers to the insurer. Failure to meet those conditions within the time required by your insurance policy could result in a denial of insurance coverage for the claim, even if the claim is otherwise “squarely” covered by your insurance policy.

Another Business: You may have negotiated contract terms with another business requiring that business to indemnify you or your company or to purchase insurance protecting your company. You and your lawyer should explore whether any such rights are available and, if so, immediately notify that other business and tender the defense of the action.

Confidentiality of Your Communications.

Your communications with your lawyer seeking legal advice about the legal papers are privileged, as long as those communications are maintained in confidence by you.

Conversely, anything you say to the Process Server, to the author of the legal papers, or to your co-workers may be used against you in the legal proceeding. You should not comment upon or discuss the matter with the Process Server, the adverse party, or your co-workers unless instructed to do so by your lawyer. Be careful about who is in the room when you speak and to whom copies of emails are sent.