Introducing Barry Zalma’s Insurance Law Deskbook
Barry Zalma’s Insurance Law Deskbook is coming to Full Court Press in 2018. Mr. Zalma has over 50 years of practical insurance claims experience culminating in this indispensable resource. In the course of his career Mr. Zalma has represented insurers, advised insurers on claims handling, interpreted coverages, and testified as an insurance expert on behalf of insurers and policy holders.
Today, you can read a preview chapter of the Insurance Law Deskbook exclusively on the Fastcase blog. If you are interested in purchasing an individual annual subscription for $225 please contact us at firstname.lastname@example.org or 202.999.4777.
The earnings of almost every civil lawyer in the United States are funded by the insurance industry. Insurance can best be described as the mother’s milk of the legal profession. The civil defense lawyer is paid by an insurer for each hour he or she works. The civil plaintiffs’ lawyer is usually paid by taking a percentage of any judgment entered in favor of the plaintiff, which judgment is usually paid by the defendant’s insurer.
In almost every situation in which a civil lawyer practices the funds for that work come, either directly or indirectly, from insurance. Consequently, lawyers must use their wits and energies to avoid or to pursue litigation to the benefit of the client. Both sides understand that an insurer will eventually pay one or both sides in the dispute. Insurance is important to every civil dispute and even some that fall within the criminal courts.
Every lawyer retained to prosecute or defend a civil suit should begin the representation with a serious effort to find insurance coverage for the benefit of the client or the defendant the client is suing. If no insurance is available it is essential that the plaintiffs’ counsel determine the assets of the defendant(s) to satisfy any judgment. It makes no sense to sue a judgment proof defendant.
A lawyer who does not know the law of insurance will file a suit for actions excluded from every insurance policy the defendant may have. The lawyer who understands insurance will provide a suit whose judgment can be collected or will provide a defense to the client that will pay for the defense of the defendant and, if necessary, satisfy any judgment entered against the insured. Without that knowledge, the lawyer without sufficient insurance knowledge will find he or she is in trial litigating with duct tape firmly self-placed across his or her mouth and unable to intelligently evaluate the case.
Lawyers are paid by insurers if:
- The tort lawyer is retained by a plaintiff and subject to a contingency fee agreement whose fee, as part of any judgment, is paid by an insurer.
- The tort defense lawyer is paid directly by the client’s insurer(s).
- The insurance defense lawyer is paid directly to defend an insurer.
- The insurer client pays the insurance coverage lawyer whose practice is limited to litigating against insurers.
- Insurers pay the regulatory lawyer who deals with regulatory agencies on behalf of or against the interest of insurers a fee.
- An insurer pays the patent lawyer who determines that the suit for infringement is covered by insurance.
- An insurer pays the transactional lawyer who writes contracts to compel insurance to be available for the benefit of his or her client.
- The prosecutor whose practice is limited to the prosecution of insurance fraud is paid by funds paid to the state by insurers to prosecute crimes against insurers.
- The criminal defense lawyer who defends a client against the crime of insurance fraud is paid by his client as a result of an insurance claim.
Every civil lawyer should understand that a major part of the lawyer’s income comes, directly or indirectly, from insurance. Since insurance is an important source of funds for the success of a civil law practice, it is imperative that every lawyer has a basic understanding of the law of insurance.
Similarly, prosecutors or criminal defense lawyers dealing with the crime of insurance fraud must understand the law of insurance to properly represent the state or the defendant. Indeed, the lawyer who is ignorant of the law of insurance cannot adequately serve his or her clients. Ignorance about insurance and insurance law is not incurable—a review of the material in this book will cure insurance ignorance as antibiotics cure pneumonia.
A thorough knowledge of insurance law is also important to risk managers, property owners, business owners, insurance underwriters, insurance brokers and agents, and insurance claims personnel.
It was for everyone who earns a living from, or with the assistance of, insurance that this book was written.
The purpose of the book is to assist the law student, the practicing lawyer, the insurance lawyer, professional claims personnel, persons who are insured, and all those who are involved with insurance understand insurance and its application to claims situation. The book includes digests of, and the full text of, insurance‑related decisions of the United States Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the law that governs insurance transactions in the United States.
Those who are new to the subject of insurance will find this e-book a resource and a starting point for research. It can also be used as a basic training course for those who are just beginning the practice of insurance law or the claims business; for those representing insurers, those representing people who are insured; or for those litigating against insurers.
The Definition of Insurance Today
In the U.S., California has, by statute, created one of the clearest definitions of insurance. The California Insurance Code states:
Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event. [California Insurance Code ‘ 22]
The California Legislature, by Insurance Code Section 22, merely codified three centuries of common law defining insurance. This definition should apply in most states. Whether codified, or only part of the state’s common law, there can only be insurance if there is an agreement to indemnify against a contingent or unknown event.
The taking of risk is the essence of insurance since the ancient Babylonians wrote the first contract on clay tablets more than 3,000 years ago.
As U. S. Supreme Court Justice Stewart said in Jacobellis v. Ohio, 378 U. S. 184, 197 (1964), when dealing with pornography, “I know it when I see it,” most members of the public would be hard-pressed to define insurance but claim to know it when they see it. In fact, over the last 45 years I have asked every insured person with whom I come in contact if they have read and understood their insurance policy. So far, only two have answered yes and they both lied, even though modern insurance policies are “easy to read” or written in English a third-grader can understand.
Many states have different definitions of the word “insurance” but each have the same essential elements:
- It must be a written contract.
- One party (the insurer) agrees with the other (the insured).
- The insurer, for consideration (payment of a premium) agrees to indemnify the insured.
- The promise to indemnify is limited to certain identified risks of loss arising from a fortuitous, contingent or unknown event.
Before making a decision that a contract is insurance it is important to use more than the concept of “I know it when I see it.” Insurance is always a contract. A contract, even one that agrees to indemnify another, is not always insurance. It can be a simple contract of indemnity without a need for the fortuity that is the basis of insurance.
The Insurance Law Deskbook allows a professional to deal with insurance, insurance claims, and insurance claims disputes.