In Texas – Who Do You Sue?

You live in Grand Prairie, Fort Worth, Arlington, Dallas, Weatherford, or anywhere else in Texas and you get treated wrong with your insurance policy – Who do you sue? The answer is not very hard.
First of all …. seek the advice of an experienced Insurance Law Attorney. Then …
The Texas Insurance Code, Section 541.151, provides that a person who has sustained damages caused by another’s engaging in unfair or deceptive insurance practices may sue the person engaging in those acts or practices. Texas Insurance Code Statute, 541.002(2) defines “person” to mean “an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd’s plan, fraternal benefit society, or any other legal entity engaged in the business of insurance, including an agent, broker, adjuster or life insurance counselor.”
The Texas Supreme Court, in Liberty Mutual Insurance Co. v. Garrison Contractors, Inc., applied the plain language of the above statute to hold that the term “person” includes businesses and individuals “engaged in the business of insurance.” But, the statute would not apply to an insurance company employee that was not engaged in the “business of insurance.” This would include persons who have no responsibility for the sale or servicing of insurance policies and no special insurance expertise, such as a clerical worker or janitor. The distinction here is that the person who could be held liable under the statute is someone such as the agent whose job duties include soliciting and obtaining policy sales, explaining policy terms, and explaining premiums, – these are the persons who could be held liable under the statute.
Engaging in unfair practices in “the business of insurance” is the key to liability. Those engaged in it may be liable. Those who are not, may not be liable.
In addition to the court’s holding in the above case, Liberty Mutual v. Garrison, which held that the sale of a policy is part of the business of insurance, the court also has held that those involved in the investigation and adjustment of claims and losses are also “engaged in the business of insurance.” This is affirmed in the Texas Supreme Court case, Vail v. Texas Farm Bureau Mutual Insurance Company, decided in 1988. This case makes it clear that the investigators and adjusters working for the insurance company can be held liable for their actions under the Texas Insurance Code.