What to do if I’m the sole proprietor of a small business and an insurer is trying to sue me because one of my subcontractors accidently damaged some items in a customer’s house?

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What to do if I’m the sole proprietor of a small business and an insurer is trying to sue me because one of my subcontractors accidently damaged some items in a customer’s house?

He was not at fault. Does the insurance company have the right to seek reimbursement from me for the money they had to pay to my customer (the insured).

Asked on January 30, 2013 under Insurance Law, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Absolutely the insurance company has a right to reimbursement/contribution from you. You hired the sub-contractor.  You have to prove the damage was not done by your sub-contractor or that the damage was done by someone else in order to negate any liability from you.  You, however, if liable, can seek contribution from your sub-contractor by suing him for negligence or breach of contract.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

What you are facing is a subrogation claim by the insurance carrier that paid off a claim on behalf of its customer stemming from the alleged negligence of your company. I suggest that you immediately tender the lawsuit to your own insurance carrier to defend the lawsuit and retain an attorney in the interim to defend the matter.


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