What does claims litigation involve?

Claims litigation specifically pertains to the legal process involved in resolving disputes related to insurance claims that have escalated to the point of requiring court intervention. This process includes formal proceedings where parties present their cases—typically the insured and the insurer—to a judge or jury who then make binding decisions about the outcome of the claim dispute.

Litigation can arise when negotiations fail, and it requires a thorough understanding of legal principles, evidence, and courtroom procedures. Claims litigation plays a critical role in the insurance industry as it serves as a mechanism for insured parties to seek enforcement of their rights under a policy when a dispute arises. It is essential for adjusters and other stakeholders to recognize the distinction between litigation and other processes like mediation or direct negotiations, which are more informal and aim to resolve disputes without court involvement.

Understanding the litigation process helps adjusters appreciate the potential implications of a claim being contested and underscores the importance of adeptly managing claims to avoid escalation into litigation, if possible.