Who Pays on a Personal Injury Claim?

Most personal injury claims are brought to recover money damages for harm caused by the negligence of some person or company. Negligence is the primary basis for claims arising out of auto accidents, slip and falls, trip and falls, and medical and dental malpractice.

Auto policies provide coverage personal injury claims arising out of an insured’s negligence operating a car. Homeowner’s policies provide coverage for claims arising out of an insured’s negligence around the home. They also provide coverage for damage done by the homeowner’s pets. Commercial general liability policies (CGL policies) provide coverage for claims the business owner or employees were negligent in connection with the business’s operations. Malpractice insurance provides coverage for claims a doctor or dentist was negligent in providing medical care.

Most personal injury lawyers, including those at Baumgartner, Nelson and Wagner, PLLC, work on a contingency fee basis. If the client does not make a recovery on the claim, the lawyer does not get paid a fee.

In a contingency fee case, it does not make financial sense, from the perspective of either the lawyer or the client, for a lawyer to take on or pursue a claim where there will be no recovery even if the client prevails. So most personal injury lawyers will only pursue a claim if there is insurance available to pay out on the claim. They usually will not go after the defendant’s personal assets, unless the lawyer believes both that their client’s recoverable damages and the defendant’s personal assets are significantly greater than the available insurance.

As a condition of making any payments under the liability coverage of a policy, an insurance company will insist on a release of all claims against their insured, protecting the insured’s personal assets from the claim. So while a person or company’s legal liability for their negligence is the basis for most personal injury claims, payment for the harm caused by that negligence will usually come from an insurance company.