Many liability insurance policies include a duty or obligation for the policyholder (insured) to cooperate with the insurance company (insurer). This clause in the insurance policy (contract) is known as the cooperation clause.

The duty to cooperate generally requires insureds to cooperate with their insurer when filing an insurance claim. This cooperation often involves:

• Providing relevant information about the claim during the investigation;

• Assisting in the investigation;

• Avoiding any action that compromises the claim or investigation; and

• Providing access to relevant records.

An insured’s cooperation generally allows the insurer to investigate the claim, make an informed decision on coverage of the claim, and prevent insurance fraud. The insured must be careful in its communications with the insurer during this cooperation phase, as communications and information shared with the insurer may be discoverable (obtainable) by an opposing party in litigation over the underlying event.

If an insured fails to fulfill its duty to cooperate with the insurer, the insurer may have grounds to deny coverage for the claim or terminate the insurance policy. Insurance coverage and claims issues are often complex and an insured is usually well-served by promptly discussing these matters with an experienced insurance coverage lawyer.

In North Carolina, as in many other states, liability insurance policies typically include a cooperation clause that obligates the policyholder to cooperate with the insurer during the claims process. This duty to cooperate involves providing pertinent information, assisting in the investigation, not taking actions that could jeopardize the claim, and allowing access to relevant records. Such cooperation is crucial for the insurer to thoroughly investigate the claim, determine the extent of coverage, and prevent fraud. Policyholders should be cautious when communicating with their insurer, as shared information may be accessible to others if litigation arises from the incident that led to the claim. Failure to cooperate can result in the insurer denying the claim or canceling the policy. Given the complexities of insurance claims and coverage, policyholders in North Carolina are advised to consult with an attorney specializing in insurance coverage promptly when dealing with these matters.