Dorel was insured for up to $6 million and had a surplus policy from Ironshore Inc. to provide an additional $25 million in coverage. Ironshore`s contract with Dorel contained a support and cooperation clause stipulating that Ironshore could partner with Dorel to defend a claim. In exchange, Dorel had to cooperate if Ironshore made use of its right and asked Dorel to promptly provide all legal information requested by Ironshore. Hello! My clients never like it and neither do I. And really, what good are most employers when an employee they`re fired testifies on their behalf? My first answer is normally to demand that this be removed from the agreement. But management lawyers like these clauses, so here`s what I usually do, it`s going to work. First of all, I ask for such a request: when an action is pending, the insurance company often needs the assistance of its policyholder to defend itself against the right invoked by the applicant. It needs the policyholder`s information about the event on which the complaint is based. Without the participation of the policyholder, the insurance company may not be able to present the best defence against the claimant`s claim. It looks pretty simple. Some cooperation clauses may include more detailed language. This information may indicate the degree of cooperation that the insured must make during an examination and the time it may take him to help.
It should go without saying that the policyholder must be completely truthful in all his statements. But what if the policyholder has an independent right against a third party who, in turn, sued him? What „cooperates. .. with respect to the payment of the debt“ in this situation, and what does that require? The cooperation clause is intended to help the insurer to postpone the right invoked against its policyholder, not to allow the insurance undertaking to negotiate with the policyholder`s rights against others. Similarly, an insurance undertaking may not use the cooperation clause to compel a policyholder to assist it in disputes concerning whether the right is covered. That way, I don`t have to worry about the jerky employer saying that the employee has to come to a new job during the most important sales interview, rush hour, or the first day. If the employer wishes to cooperate, he can arrange it after work or on a weekend, so that the employee is not fired from his new job. . . .