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Explaining the Investigation of Third Party Insurance Fraud  

https://zalma.com/blog

nsured 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.