Exploring the Liability in Wrongful Death Cases Who Pays

One of the challenges of any lawsuit is, “How is the defendant going to pay the lawsuit if we win?”.  Consider this:  If you are successful and achieve a $10 million jury verdict in a wrongful death lawsuit, against a person who has $25,000 in insurance and no job, what is your case really worth?  Collection of a judgment or finding a “deep pocket” responsible for any judgment is frequently the greatest challenge of any wrongful death lawsuit.  In both Missouri and Kansas, for example, only requires an operator of a motor vehicle to carry $25,000 in automobile liability insurance.  If the same collision injures two or more people, the total minimum insurance required is $50,000.  Some express this as “25/50” coverage.  Neither amount is likely to cover the likely outcome of a wrongful death lawsuit or claim.

Bankruptcy laws guard assets and income of people. Even a rich person can legally dodge most collection efforts beyond what such a person may carry as liability insurance. Hence, a homeowner’s insurance policy or automobile insurance policy may be the best or even the sole method for collecting the damages for a wrongful death lawsuit.  While the limits of homeowner’s policies tend to be somewhat higher than the minimum limits required for automobile insurance, such limits are almost always much less than the damages an average wrongful death lawsuit may demand.

Moreover, although many negligent parties have liability insurance, the lawsuit still needs to name the negligent party. The at-fault party could be an individual or a corporation. In some situations, one can sue an insurance company as the direct party. More commonly, one files a lawsuit against an individual or company. The party responsible for causing the death is typically the one who pays in a wrongful death lawsuit.

How Compensation Works

Defendant:

The defendant is who they file the wrongful death lawsuit against.  It can be a person, company, or entity that is responsible for the wrongful death. If their negligent actions led to the death, they may bear financial responsibility for the damages. But what if the defendant is unwilling, or unable, to pay a judgment?

Insurance Coverage:

If they find the defendant liable, their insurance is who may pay for the damages in the wrongful death lawsuit. Liability insurance can include auto insurance, homeowner’s insurance or professional liability insurance. Corporations often have insurance that is greater than the typical individual. Though, the corporation may have what they call a “retention” (kind of like a deductible), that it must pay before the insurance company is responsible.

Many well-to-do individuals carry an “umbrella” policy which expands the overall limits of liability insurance. An umbrella policy only applies once the underlying limits of liability insurance have been paid or offered.  Many individuals carry umbrella policies of as much as an additional $1 million.  Of course, no insurance company has an obligation to pay its limits until a result is obtained against its insured for at least the amount of the limits of liability.  Hence, even if someone has a basic policy of $300,000 and an umbrella policy of $1 million, only either a compelling case potentially worth $1.3 million or a judgment will obligate the insurance company to pay on behalf of its defendant insured. Solvent product manufacturers, even those without insurance, are generally financially responsible for the products they sell. Litigating a case against a product manufacturer for the design of a defective product may be protracted and difficult litigation. If you are successful, most manufacturers will pay a judgment. Even those without insurance coverage.

Personal Assets:

The judgement may use personal assets to cover the compensation for the wrongful death. If, for example, there is no insurance coverage or the coverage does not cover the damages awarded, one may look to the bank accounts, real estate or other valuable assets of a judgment debtor. For individuals, these can be difficult to find, and even more difficult from which to collect.

Debt collection on judgments involves procedures such as “execution” or “garnishment” which can take years to pursue to conclusion and which rarely produce meaningful recovery. Garnishment can involve direct payment from someone who owes money to the judgment debtor, such as an individual who has an income. There are limits on how much one can garnish from a person’s paycheck.  For substantial judgments, garnishment is an ineffective process for collection.  Execution involves “levying” on identified assets of the judgment debtor, such as when he or she owns a motor vehicle, that can be sold and the proceeds used to help pay a judgment. This process is tedious and is not feasible when collecting substantial wrongful death judgments.

Third Parties:

If there are multiple parties responsible for the death, who pays for the wrongful death case? They may share the liability among them. The party’s degree of fault determines the portion of the damages they require them to pay.

Corporations:

Unlike individuals and personal insurance, corporations or other businesses usually have more substantial insurance coverage and meaningful assets from which to collect a judgment.  Corporations also frequently have “excess” or “umbrella” policies of insurance that extend coverage limits above the basic insurance policy.  For example, a product manufacturer may have a $1 million retention, or deductible. It must pay that before the first level of insurance is responsible.  Above the retention, the corporation may have a $1 million excess policy as the first “layer” of insurance.  Once that layer is exhausted or paid, there may be more substantial policies.  The amount of any given layer of insurance is a generally a function of the nature of the corporation’s business and the projected “exposure” it has to claims and substantial lawsuits.

In some instances, most commonly in automobile collisions, the individual who is aggrieved or damaged may have insurance for uninsured motorists or under-insured motorists.  There may be a question of whether the insurance applies to you, but in those instances when it does, it may extend the type of claim that can be made for a wrongful death and present another “deep pocket” from which to pursue compensation.  When such insurance is available, the insurer for such benefits stands in the shoes of the responsible negligent driver. Though, the lawsuit pursues against the insurance company itself.

Monsees & Mayer Wrongful Death Attorneys

Product manufacturers and insurance companies appear to have endless resources at their disposal, but sometimes proving the liability in the wrongful death case is only the first step to fairly compensating devastated family members.  Because of the multiple avenues for collection of judgments, the potential for personal or corporate bankruptcy, and other avenues of collection, you may need an experienced attorneys to pursue a case for wrongful death.  Getting a judgment is frequently only the first step in a drawn-out process. Our attorneys work with teams of experts and specialists to build a case using the latest technologies and available data on accident causes and effects. We know how to confidently prepare and present wrongful death cases that effectively convince juries and judges to deliver favorable outcomes and how to find the assets and insurance policies necessary to compensate folks who have suffered the loss of a loved one due to wrongful death. Contact our office to speak with one of our wrongful death attorneys today. Learn about who may pay in your wrongful death case.