What is an insured’s duty to cooperate?

| Jul 28, 2020 | Insurance Coverage

There are several situations when Illinois property owners could be held liable for an accident, whether it occurs on commercial or private property. The risk of such an accident – and the risk of facing a liability claim – is only one of the many reasons it is important for property owners to have the proper insurance coverage.

If property owners face a liability claim, they usually file a claim with their insurance company to build a defense and protect their interests. To provide the proper coverage, insurance companies usually conduct an investigation of the incident. In these cases, the duty to cooperate often comes into play.

How does the duty to cooperate work?

The cooperation clause of an insurance contract explains the details of the duty to cooperate.

As the name implies, the duty to cooperate requires insureds to cooperate with insurance companies when they file a claim. This often involves:

  • Providing relevant information about the claim during the investigation;
  • Allowing the insurance company to access records;
  • Assisting in the investigation, in certain cases; and
  • Avoiding any act that compromises the claim or investigation.

The terms might vary depending on the individual contract, but these are the general responsibilities insureds must uphold.

Fulfilling the duty to cooperate allows insurance companies to execute a proper investigation of the claim filed and prevent insurance fraud. A thorough and proper investigation requires insureds and insurers to exchange a significant amount of information. The duty to cooperate only upholds and facilitates this.

In turn, the duty helps to protect both the insurance company and the insured.

Why should you know this?

If insureds do not fulfill their duty to cooperate after they file a claim, insurance companies could potentially have grounds to terminate coverage or the contract. It is difficult for insurance companies to prove an insured’s failure to cooperate, so this is rare.

Even so, it is still critical for insureds to understand this duty they have long before they file a claim, so they can protect their rights, their finances and their insurance coverage.