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Why Choose Vargas Gonzalez Delombard, LLP in Dallas?

At VGD, we serve policyholders across North Texas who have been wronged by their insurance providers. We understand how general liability coverage works in the context of Texas construction law, retail operations, real estate development, and transportation industries, which are central to the Dallas-Fort Worth economy. Our attorneys bring courtroom-tested experience and negotiation skills to every case, and we’re not afraid to take on national carriers when they put profit over policyholder rights.

What Is General Liability Insurance?

Commercial General Liability (CGL) insurance protects your business from third-party claims involving:

  • Bodily injury (e.g., a customer slips and falls)
  • Property damage (e.g., contractor damages a client’s building)
  • Personal and advertising injury (e.g., slander, copyright violation)

In Texas, CGL insurance isn’t legally required for all businesses, but it is often mandated by contracts, especially for construction projects, commercial leases, and vendor agreements. The Texas Department of Insurance (TDI) recommends that all business owners evaluate their liability exposure and carry appropriate coverage.

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Common Insurance Coverage Disputes in Dallas

General liability coverage disputes in Dallas frequently involve:

  • Denial of claims based on exclusions (e.g., employee injury, workmanship defects)
  • Refusal to defend a lawsuit despite coverage triggers
  • Conflicts over additional insured status for subcontractors or project owners
  • Delays in claim payment, violating Texas Insurance Code § 542.058
  • Rescission of the policy for alleged misrepresentations in the application

In construction-heavy regions like North Texas, disputes often arise from incidents involving multiple parties and overlapping policies.

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Why Are Insurance Disputes Common in Texas?

Severe weather risks, including hail, wind, and flash flooding

  • Texas consistently ranks among the top U.S. states for severe weather insurance claims, especially hail and flood
  • According to HOMEOWNERS INSURANCE LOSS DATA, Texas had the highest number of hail loss claims in recent years
  • The Texas Water Development Board reports that all 254 Texas counties have experienced flooding, and flash floods are especially common
  • The National Weather Service confirms that North Texas frequently experiences damaging wind events and tornadoes

Ambiguous policy language, often used to limit payouts

  • Texas courts follow the doctrine that ambiguous insurance contracts are construed in favor of the insured, per RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113 (Tex. 2015)
  • The Texas Supreme Court has stated that exclusions and limitations must be "clear and unambiguous" to be enforceable (Nat’l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552 (Tex. 1991))

Strict deadlines under Texas law for insurers to acknowledge and resolve claims

  • The Texas Prompt Payment of Claims Act, under Texas Insurance Code § 542, sets clear deadlines
  • Insurers must acknowledge a claim within 15 calendar days of receiving notice
  • They must accept or reject a claim within 15 business days (extendable to 30 in certain cases)
  • Failure to pay timely may result in 18% interest and attorney’s fees under § 542.060

Bad faith conduct, where carriers knowingly delay or underpay valid claims

  • Policyholders may sue for bad faith under both common law and the Texas Insurance Code § 541
  • Section 541.060 prohibits insurers from unfair settlement practices, including "failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement"
  • Courts recognize bad faith claims when insurers act "knowingly" or "recklessly" in denying valid claims

What to Expect During a Dallas Insurance Dispute

At VGD, our litigation process includes:

  1. Policy Review: We identify all coverage triggers, exclusions, and obligations.
  2. Claim Investigation: We review your loss documents, adjuster notes, and internal claim records.
  3. Demand Letter: We formally request compliance and payment under Texas law.
  4. Notice of Violation: Filed under Texas Insurance Code § 541 or 542A, giving the insurer notice of a potential lawsuit.
  5. Litigation: We file suit in Dallas County or federal court for breach of contract and statutory violations. We may also seek 18% annual interest and attorney’s fees under § 542.060.

When to Contact a Texas Insurance Dispute Lawyer

You should call a lawyer if:

  • Your claim was denied without a clear reason
  • Your insurer is slow-walking your claim or not responding
  • You’re being sued, and your CGL carrier won’t defend you
  • The insurer rescinded or canceled your policy after a claim
  • You received a lowball settlement offer that doesn’t reflect the loss

Under the Texas Insurance Code §§ 542.055–542.058, insurers must acknowledge a claim within 15 calendar days, accept or deny it within 15 business days after receiving all required information (extendable to 30), and pay accepted claims within five business days.

Who Can Be Held Liable?

Potentially responsible parties in a general liability dispute include:

  • Your insurance company
  • Third-party contractors, vendors, or parties causing injury or damage
  • Insurance agents, for failing to secure the correct coverage or misrepresenting policy terms

Successful lawsuits may result in:

  • Full payout of the covered loss
  • Legal fees and court costs
  • 18% interest per year on unpaid amounts (under § 542.060)
  • Statutory and actual damages
  • Declaratory judgment confirming coverage
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FAQ's

Does Texas allow punitive damages in insurance disputes?

What is the duty to defend in Texas?

How long do I have to sue my insurer in Texas?

Is a CGL policy the same as professional liability insurance?

Can I recover attorney’s fees in a general liability insurance lawsuit in Texas?

What happens if my insurance policy has conflicting endorsements or exclusions?

What is a 542A Notice under Texas law?

Can an insurer rescind my policy after a claim is filed?

What is the difference between a claim denial and a reservation of rights?

Does Texas allow punitive damages in insurance disputes?

Yes, but only when an insurer’s conduct is fraudulent, malicious, or grossly negligent. More commonly, statutory penalties and 18% interest under the Texas Prompt Payment statute are awarded for delay or nonpayment.

What is the duty to defend in Texas?

Texas follows the “eight corners rule”: if the facts alleged in the lawsuit could trigger coverage under the policy, the insurer must provide a defense, even if the facts are later proven untrue.

How long do I have to sue my insurer in Texas?

Generally, four years for breach of contract, but policies can contractually shorten that window to two years. Always check your policy’s legal action clause.

Is a CGL policy the same as professional liability insurance?

No. CGL policies cover third-party claims of bodily injury or property damage, while professional liability (or E&O) insurance covers negligence in services rendered. The two are not interchangeable, and coverage disputes often hinge on this distinction.

Can I recover attorney’s fees in a general liability insurance lawsuit in Texas?

Yes. Under Texas Insurance Code § 542.060 and Texas Civil Practice & Remedies Code § 38.001, policyholders who prevail in breach of contract or prompt payment lawsuits may recover reasonable attorney’s fees in addition to the insurance benefits owed and statutory interest.

What happens if my insurance policy has conflicting endorsements or exclusions?

Texas courts will construe ambiguities in favor of the policyholder. If endorsements conflict or are unclear, courts apply the rule of contra proferentem, meaning ambiguities are interpreted against the insurer, especially if they drafted the language.

What is a 542A Notice under Texas law?

Before suing an insurer for certain property damage claims in Texas, you must send a pre-suit notice under Texas Insurance Code § 542A.003. This notice gives the insurer 61 days to resolve the dispute and must include details about the claim, damages, and legal theories. Failure to comply can delay or dismiss your case.

Can an insurer rescind my policy after a claim is filed?

Only under limited circumstances. If your insurer claims misrepresentation in the application, it must prove that the false statement was material and intentional. Under Texas Insurance Code § 705.004, an insurer may not void a policy unless the misrepresentation was made knowingly and was material to the risk assumed.

What is the difference between a claim denial and a reservation of rights?

A claim denial is a firm refusal to pay based on policy terms or exclusions. A reservation of rights means the insurer will investigate or defend the claim while reserving the right to deny coverage later. While not a denial, it signals potential conflict and often requires legal review.

Don’t Let Insurers Take Advantage of You in Texas

When insurers in Dallas delay, deny, or underpay valid claims, VGD steps in to enforce the terms of your policy and demand full accountability. We understand how Texas law protects businesses—and how to use those protections in court. Contact Vargas Gonzalez Delombard, LLP today to schedule a free consultation and take the first step toward securing the coverage you paid for.

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