When a business faces a lawsuit and its insurance carrier refuses to provide a defense, the financial exposure doubles overnight. Legal costs mount without support, operations are disrupted, and the company is forced to fight on two fronts at once. This is exactly the situation the owner of a chain of radio stations faced when a competitor filed an unfair competition claim and their insurer, Fireman’s Fund, denied any obligation to defend. Rather than accepting that denial, our client brought the matter to Callahan & Blaine, PC, and the outcome shifted entirely.
In Liberman Broadcasting v. Fireman’s Fund, our insurance litigation attorneys pursued the carrier directly. We filed suit against Fireman’s Fund and argued that the refusal to defend constituted a breach of contract and an act of insurance bad faith under California law. The result was a multi-million dollar settlement that fully reimbursed our client for all defense costs incurred and recovered attorneys’ fees. It is the kind of outcome that is only possible when a policyholder refuses to accept a wrongful denial as the final word.
Why Insurers Deny the Duty to Defend
California imposes a broad duty to defend on insurers. A carrier must defend its policyholder against any claim that potentially falls within the scope of the policy, even when the ultimate liability is uncertain. In practice, insurers sometimes take a narrow view of policy language to avoid that obligation. When that happens, the policyholder is left to fund their own defense while the insurer sits on the sidelines.
In this case, our client held a commercial insurance policy that included coverage for unfair competition and related claims. Fireman’s Fund denied coverage despite the policy language. Our firm challenged that denial through litigation, and the insurer ultimately settled for a figure that made our client whole, including all fees and costs the client never should have been forced to pay. This result reflects the complex business litigation approach we bring to every coverage dispute: we pursue accountability through the courts, not just correspondence.
What Businesses Lose When Defense Is Wrongfully Denied
The harm from a wrongful denial of defense goes beyond legal fees. Businesses face distraction from operations, reputational exposure during prolonged litigation, and the financial burden of fighting without a carrier that is contractually obligated to stand with them. The California Department of Insurance tracks complaint data from policyholders across the state each year, and wrongful claim handling remains among the most frequently cited categories of consumer grievances. You can review how insurers are rated on complaint data published by the California Department of Insurance.
When a denial is received, businesses should act quickly. California law gives policyholders the right to demand a written explanation, to seek a declaratory judgment on coverage, and to assert bad faith claims when the insurer’s conduct is unreasonable. Delays in pursuing these options can limit the remedies available and allow the financial damage to compound.
The Firm Behind This Result
Callahan & Blaine, PC has been resolving insurance coverage disputes since 1984. Our record in this area includes the largest insurance bad faith judgment in Orange County history at $58 million, along with hundreds of other seven and eight-figure results in insurance litigation matters across California. Managing Partner Edward Susolik has handled over 1,500 mediations, has been named to the Top 100 Super Lawyers in Southern California every year since 2009, and is recognized as one of the leading insurance attorneys in the United States. You can review his full background on his attorney profile.
All 30 of our attorneys bring a minimum of eight years of litigation experience, and most have 15 to 30 years in the courtroom. Our insurance practice encompasses commercial general liability, professional liability, directors and officers coverage, business interruption, and property damage claims. No matter how confident an insurer appears in its denial position, our attorneys will examine the policy language, the underlying claim, and the facts to identify every available path to recovery.
Take the Next Step
A wrongful denial of insurance coverage is not something a business must absorb quietly. If your insurer has refused to defend you in active litigation, or has denied a claim you believe is covered under your policy, our attorneys are prepared to evaluate your situation. To review our full record of case results and see what is possible when policyholders fight back, visit our results page. When you are ready to discuss your matter, contact Callahan & Blaine, PC to submit your potential case.
