Quote of the Day - The lion and the calf will lay down together, but the calf won't get much sleep.
Once an insurance company rejects a claim, it can't later try to jump into the lawsuit and salvage what may have been a mistake. Zurich insured CalTrans for any negligence arising out of its highway designs. One of those designs apparently led to several deaths and injuries. CalTrans tendered the claim to Zurich, who promptly denied coverage.
During the course of the inevitable wrongful death litigation that arose from that accident, the parties (several years later) realized that there probably was coverage under the policy and elected to settle. For $29 million. CalTrans paid part of that claim and then assigned the remainder of the judgment to the Plaintiffs who were set to sue Zurich and recover just over $27 million.
Zurich, sensing a problem, sought to intervene in the original lawsuit in an attempt to have some effect on the settlement and ultimate judgment it would eventually have to pay. In the case entitled Noya v. A.W. Coulter Trucking, the trial court and appellate court denied Zurich's motion to intervene, saying it was too late. If Zurich had cared that much, the court reasoned, then it should have defended CalTrans in the beginning or tried to become involved much earlier.
Just goes to show you. When money matters, insurance companies pay attention. It will be an expensive lesson to learn.