The total amount of available liability insurance is a key factor in assessing a personal injury case and developing a strategy. As such, it is one of the first pieces of information sought by parties at the outset of a claim or lawsuit. Under Massachusetts law, before suit is filed, an injured party has the right to obtain information about the limits of a potential defendant’s liability coverage by making a written request to the potential defendant’s insurer. Mass. Gen. Laws ch. 175, § 112C. Often, an insurer’s response to this request is its production of the declarations pages for the policies in question. Once suit is filed, a defendant has an obligation in discovery to produce the “existence and contents of any insurance agreement.” Mass. R. Civ. P. 26(b)(2). At this stage, a defendant may again only produce the relevant declarations pages, not the complete set of policy documents.
While declarations pages might be a good starting point for determining the amount of available insurance coverage under a policy, the actual amounts listed on the face of these pages may not provide a complete picture. Additional coverage might exist under a specific endorsement that is referenced on the declarations pages only by name or number.
Take, for example, a situation where an injured guest makes a claim against his host and wants to know how much liability insurance the host has. The host or the host’s insurer produces copies of the declarations pages of a homeowners policy stating that the host has $500,000 in liability coverage. Question answered? Not necessarily. The declarations pages may also identify the existence of an endorsement, such as a Homeowners Additional Coverage Endorsement, with language similar to the following:
Limit of Liability. Our total liability under Coverage E [liability] for all damages resulting from one occurrence will not be more than the limit of liability for Coverage E as shown in the Declarations plus $100,000. This limit is the same regardless of the number of insureds, claims made or persons injured. [Travelers Form 55621 WA]
Therefore, although the declarations pages state that the limit of the host’s liability coverage is $500,000, it may really be $600,000.
The lesson here is that to obtain a complete picture of available insurance coverage, all the policy documents should be examined as a whole and as early as possible. This is important not only to claimants seeking to maximize their recovery, but also to defendants and their insurers who may need to address issues arising out of demands on policy limits, multiple tiers of coverage or bad faith settlement claims. Of course, claimants do not have the benefit of having access to all of the policy documents. They must request them from the defendant or its insurer. In the situation where only the declarations pages are produced, the claimant should insist that all policy documents be turned over, especially those documents referenced on the declarations pages themselves. Just as it would ask for the complete production of information cross-referenced in documents pertaining to liability or damages, a party should follow up on all leads pertaining to available insurance coverage.