Legal Definitions - cooperation clause

A cooperation clause is a standard provision found in most insurance policies. It legally requires the policyholder (the "insured") to actively assist their insurance company (the "insurer") when the company is investigating or defending against a claim made under that policy.

This assistance can take many forms, such as providing information, submitting documents, making property available for inspection, or even testifying in court if a lawsuit arises. The purpose is to ensure the insurer has all necessary information to properly evaluate the claim and, if needed, defend the insured against any legal action.

Here are some examples illustrating how a cooperation clause works:

• Example 1: Auto Accident Claim

  Imagine David is involved in a car accident, and the other driver claims David was at fault, filing a claim against his auto insurance policy. David's policy contains a cooperation clause. When his insurance company begins its investigation, David is required to provide a detailed written statement about the accident, share any photos or videos he took at the scene, and allow the insurer's appraiser to inspect his damaged vehicle. If the other driver decides to sue David, the cooperation clause would also obligate David to attend depositions or court hearings as requested by his insurer's legal team, who would be defending him.

• Example 2: Homeowner's Property Damage

  Sarah discovers extensive water damage in her kitchen due to a burst pipe and files a claim with her homeowner's insurance. Her policy includes a cooperation clause. To process the claim, the insurance company requires Sarah to allow their adjuster access to her home to assess the damage, provide receipts for damaged appliances or furniture, and answer questions about the timeline of the incident. If the insurer believes a faulty product caused the pipe to burst and decides to pursue a claim against the manufacturer (known as subrogation), Sarah would be expected to cooperate by providing any relevant purchase information or product details.

• Example 3: Business Liability Lawsuit

  A small consulting firm, "Innovate Solutions," is sued by a former client who alleges that the firm's advice led to significant financial losses. Innovate Solutions has a professional liability insurance policy with a cooperation clause. When the lawsuit is filed, the insurance company's legal team takes over the defense. The cooperation clause requires Innovate Solutions to provide all project-related documents, emails, and internal communications to the legal team. Furthermore, key employees involved in the client project may be required to attend meetings with the lawyers, provide sworn testimony (depositions), or even testify in court to help defend the company against the client's claims.