A lawyer demands compensation for damage that may involve your insurance
Coordinate liability demand with policy notification and legal response without assuming coverage or insurer defence acceptance.
Corporate Recovery Partners
01 / 06
The demand raises an insurance question
A hypothetical contractor receives a lawyer's letter alleging damage caused during its work. The owner remembers buying liability insurance and assumes the insurer will take over automatically. Locate the policy and contact the insurer or broker promptly through verified channels, while obtaining advice about the demand. Insurance may be relevant, but its role needs confirmation under the actual policy and claim.
Keep every page and attachment, the date received and the relevant project records. Give an accurate account of what is known, separating observations from assumptions. Do not withhold an earlier complaint because it seems minor. The adviser and insurer need the actual sequence to assess the matter and identify any required information.
Business.gov.au recommends contacting an insurer promptly when a claim is needed and checking policy time limits. It identifies contracts and other records as possible supporting documents. Ask how to notify this particular demand and retain confirmation. This does not establish that the allegation is covered or that the insurer has agreed to defend or pay it.
In the hypothetical example, the broker may pass information on while the insurer considers the position. Ask who is responsible for responding to the claimant in the meantime. Do not assume forwarding the letter completes the legal response or changes the sender's stated date. Give any urgent court papers direct legal attention.
Review proposed admissions or settlement carefully
Before promising payment or agreeing to repair terms, ask the appropriate advisers how the policy and legal position should be handled. Do not invent a blanket rule about what every policy prohibits. Keep communications coordinated and preserve anything already sent. An honest account of earlier statements is more useful than trying to edit them out of the file.
Retain the claim reference, requests and coverage correspondence alongside the demand. CRP can help organise the commercial context. The useful outcome is a confirmed allocation of responsibilities, so neither the business nor its advisers assume somebody else has taken over a response that remains outstanding.
