Third Party Insurance Fraud Unlisted Video

A Video Explaining the Investigation of Third Party Insurance FraudShow more

Insured Suspected

If the insured is suspected of involvement in a third party insurance fraud, like a staged automobile accident, it will be necessary for the insurer to retain two attorneys.  One attorney will be required to defend the insured under the terms of the policy.  This attorney owes his or her primary duty to the client, not the insurer, so will not be advised of the potential fraud.  If he or she learns of facts that prove the insured is involved in fraud, the attorney may not disclose that information to the insurer.  He or she is also ethically obligated to refuse to participate in the fraud and would, therefore, withdraw from the defense.

Insured not Suspected

When the insurer suspects that the insured is the victim of a fraudulent claim, counsel is retained to represent the insured and given full information about the fraud. Such an attorney should be a special breed of counsel, ready to take every case presented to them to a trial before a jury. These attorneys are selected not for their negotiation skills but rather for their trial skills.

An insurer intent on defeating fraud will instruct counsel to try to a verdict every case where fraud is suspected and capable of proof. No authority should be provided for settlement other than to accept a dismissal of the suit with prejudice.