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What Triggers Insurance Coverage?

Four years of high school Latin plus one in college equals one murky memory of the dead language. Subpoena is a Latin term (meaning, "under penalty") that risk managers often encounter.

By Staff Writer | Updated on March 04, 2008

Four years of high school Latin plus one in college equals one murky memory of the dead language. Subpoena is a Latin term (meaning, “under penalty”) that risk managers often encounter. Subpoenas and deposition notices often cause risk managers to report them to insurers as notices of claims. Subpoenas or notices of depositions are not technically demands for monetary damages. If pressed on the issue, most adjusters would likely define a claim as a demand for monetary damages. (Interestingly, many insurance policies do not define the word claim.) Whether this creates an ambiguity is debatable. A hazard for insurers is that the lack of definition may muddy the waters enough that an insured could argue that a subpoena or a deposition notice are de facto claims.

Insurers disclaiming coverage may concede that both are legal documents but argue that they are not demands for any kind of damages. Yes, the documents “smell” like things that are claim-related. Companies may receive subpoenas or deposition notices as part of the discovery process in cases that are already in court, litigation that does not yet involve the entity receiving the subpoena or deposition notice. The operative word is yet, since once a fishing expedition starts, creative attorneys may find enough to later add the subpoena or deposition recipient as an additional party to the lawsuit. At this point, the matter is undoubtedly a claim, triggering an insurer’s duty to defend.

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