Insurance Law

Insurance law focuses on the legal rules and principles that govern the insurance industry. This includes regulating the amount of premiums charged, ensuring that contracts and policies are clear, and preventing insurer bad faith actions.


In addition, the law ensures that policyholders receive the coverage to which they are legally entitled. Insurance companies also must comply with laws outside of insurance (like labor, tax, and securities regulations).


Policyholders are the people or entities that are covered by an insurance policy. Depending on the type of insurance, this can include individuals or businesses. The rights and obligations of policyholders are regulated by insurance law. These laws can govern everything from the content of insurance contracts to dispute resolution procedures.

In the United States, state regulations are largely in charge of governing the insurance industry. However, some major federal legislation exists. These laws can include zoning and land use regulations, wage and hour laws, and securities regulations.

While there are many different types of insurance, most policies share a common set of terms and conditions. These terms and conditions determine the extent to which a policyholder’s insurer will cover loss. Some of these terms include the duty to investigate claims, the duty to pay valid and enforceable claims, and the right to dispute coverage in good faith.

Many insurance policies also give the insurance company control of the defense and settlement of lawsuits or other claims against a policyholder. This can be a benefit to a business, but it can also be problematic if the decisions made by the insurance company do not align with the policyholder’s interests. In these cases, policyholders can seek legal assistance. They can read the policy carefully, consult an insurance treatise, and look at caselaw that interprets the policy language at issue.


Insurers are the companies that take on the risk of losses in exchange for premiums paid by policyholders. They are governed by the same laws as other businesses and are required to treat their policyholders fairly. In the United States, the majority of insurance regulation occurs at the state level. There are also a few federal programs, such as Medicare and the Social Security Administration. State regulators oversee the operation of private insurers and create rules that govern how they conduct business. Insurers may have to pay fines or even lose their license if they break the law.

Insurance policies are often complex. They contain many different clauses and conditions, including choice of law provisions that determine which legal system will apply to a dispute. Insurers rely on lawyers to help them understand and follow the law. They may hire in-house lawyers or work for a large firm that acts as compliance counsel on behalf of clients.

Insurers must comply with certain statutory requirements, such as providing a timely notice of a denial or forfeiture and allowing the insured to request an examination under oath. Insurers may be subject to claims for breach of contract and unfair competition. In addition, they must obey the common law doctrines of estoppel and duty to speak. The latter doctrine prevents insurers from acting inconsistently with a representation they have made to the insured, so that the insured suffers detriment.


An insurance policy is a legally binding contract between the insurer and insured party. It specifies the terms and conditions of protection, including deductibles, limits, and exclusions. The contract is governed by a set of rules and regulations that are determined by state regulators. In the United States, this includes determining registration requirements for insurance companies and brokers, regulating the solvency of insurance firms, and setting standards for insurance contracts and policies.

Like other commercial contracts, an insurance policy must meet the elements of a valid contract: offer and acceptance; consideration; a legal purpose; and competent parties. The contract also must be enforceable, meaning it cannot contain terms that are illegal or void ab initio. In addition, the insurer must disclose all material information to the insured, and the insured must make truthful statements. The doctrine of uberrima fides, or the utmost good faith, is another important element of an insurance contract.

Most insurance contracts require the insured to deliver a certificate of insurance evidencing coverage. This requirement most often applies upon entry into a contract but may also apply periodically thereafter. The insurer can deny a claim or otherwise act against the insured if this requirement is not met. This is one of the reasons why it is essential for all parties to carefully read their contracts, particularly those that have contractual provisions requiring delivery of certificates.


Insurers and insureds have unequal bargaining power, and early on this led to common law doctrines prescribing rights against insurers outside the terms of insurance contracts. Professor Keeton isolates three principles that together, under various doctrinal rubrics and as reflected in legislation, account for most rights at variance with insurance provisions.

Insurance law encompasses a wide range of issues, from interpreting the meaning of policy language to establishing when claims are safeguarded by the contract. It also includes the requirement that insurers operate honorably, investigate claims fairly and swiftly, and pay the claims to which they are legally obligated.

When an insurance company fails to do this, it may be found to have acted in bad faith. Whether by misrepresenting information about coverage, refusing to make payments for an unreasonable length of time or putting the burden of proof on the policyholder, these actions are violations of New York insurance laws.

Insurance companies rely on attorneys to help them determine whether or not a claim is covered, as well as to defend them against lawsuits from insureds. People who have insurance policies rely on attorneys to bring claims against their insurance companies when they believe the company has not paid them fairly. These lawyers often practice personal injury and/or insurance law. They can work at large law firms, smaller boutiques or private practices throughout the United States.