A tolling agreement with an insurance company can be a valuable tool for insureds who are pursuing coverage for an alleged loss. This agreement is often used when there is a dispute between the insured and the insurer regarding the insurance claim, and the insured is concerned about the statute of limitations expiring before the dispute can be resolved.

A tolling agreement is a formal written agreement between the parties involved that stops or suspends the running of the applicable statute of limitations for a specific period of time. This agreement allows the parties to continue negotiations or litigation regarding the claim without worrying about losing the right to sue due to the expiration of the statute of limitations.

In the context of insurance claims, a tolling agreement is typically used when an insured files a claim with their insurance company and the insurer denies the claim, either in whole or in part. The insured may then choose to file a lawsuit against the insurer to contest the denial. However, if the statute of limitations for the claim is about to expire, the insured may be forced to file the lawsuit prematurely, before all relevant evidence has been gathered or analyzed.

This is where a tolling agreement comes in. By agreeing to toll the statute of limitations, the parties can continue to negotiate and litigate the claim without the fear of losing their right to sue due to the expiration of the statute of limitations. The agreement provides the parties with more time to gather and analyze the evidence, negotiate a settlement, or prepare for trial.

A tolling agreement is especially useful in complex insurance claims, such as those involving environmental damage, construction defects, or professional liability. These claims often involve multiple parties and complex legal and factual issues, which can take years to resolve. If the insured is forced to file a lawsuit prematurely due to the statute of limitations, they may miss out on the opportunity to recover all of their damages.

It is important to note that a tolling agreement does not resolve the underlying dispute between the parties. It only suspends the running of the statute of limitations for a specific period of time. If the parties are unable to resolve the dispute during the tolling period, the statute of limitations will continue to run once the tolling period ends.

In conclusion, a tolling agreement with an insurance company can be a valuable tool for insureds who are pursuing coverage for an alleged loss. This agreement allows the parties to continue negotiations or litigation without worrying about losing the right to sue due to the expiration of the statute of limitations. If you are involved in a complex insurance claim and are concerned about the statute of limitations expiring, consider discussing a tolling agreement with your insurance company or legal counsel.