You have reached an agreement with the insurance company on your Kentucky accident case. They have sent you a check and you are ready to finalize your case and put the headaches of dealing with the insurance company behind you. There is one last thing you must do before you get paid and that is sign the release. Not a big deal, right? Think again.

Almost all insurance company releases in Kentucky dealing with personal injury cases have an indemnification clause in them. Indemnification means that you, the injured accident victim, are agreeing that the settlement the insurance company has given you is for everything. If the insurance company is sued by someone that says they are owed money for this accident you are agreeing to defend the insurance company against the claim. In other words the money comes out of your pocket.

Releases can be tricky and indemnification clause can have consequences several years after a settlement is reached. A recent case from the Supreme Court of Kentucky discusses this issue, which can be a major financial pitfall to an accident victim, in Coleman v. Bee Line Courier Service, Inc. Coleman had incurred $5,737.00 in Basic Reparation Benefits. This is money her insurance company paid for medical bills and is usually reimbursed by the at-fault insurance company. Ms. Coleman settled her case for $6,500.00. The insurance adjuster faxed Ms. Coleman a “Release of All Claims” which was signed. There was an indemnification clause in the release where she agreed “to hold the released parties harmless and indemnify them for any claims asserted by third parties…including…all medical providers and any other insurance carriers against the proceeds of this settlement.”

When you are signing a release so you can get a check you need to be very careful. Here is what happened next. Ms. Coleman’s insurance company sought reimbursement for what they had paid from Bee Line’s insurance carrier. Citing the release and the indemnity clause Bee Line demanded Ms. Coleman to defend and pay if necessary.

The Supreme Court of Kentucky found that since the release was a general release and did not mention No-Fault Benefits it did not apply to them. They ruled that Ms. Coleman was not contractually obligated to defend reversing the lower courts.

This is good news for accident victims clarifying the law that had been up in the air since the Court of Appeals decision. You still need to be extremely careful when you sign a release. Make sure you understand every term. If the release Ms. Coleman had signed had specifically referenced the Basic Reparation Benefits or No-Fault Benefits she would have been on the hook for that money. You will be held responsible for what you sign. Make sure you know and understand what you are signing so you are not surprised later.

• Tweet
• "&title=""">