This article originally appeared in Anderson Kill's Policyholder Advisor (February/March 2004).

In order to resolve large insurance claims, litigation has become the order of the day. Insurance companies have long known that the time value of money far outweighs the cost of litigation and, therefore,their marching orders to their claim representatives would appear to be “delay, delay, delay.” Insurance coverage litigation can be expensive and disruptive because few judges understand how to move such cases forward and avoid playing into the hands of insurance company lawyers. Policyholders who stick it out in litigation may recover their attorneys fees under certain circumstances and in certain states. The business pressures to settle before trial often become overwhelming, however, forcing the policyholder to take discounts in addition to having borne the cost of litigation.