Will the personal liability in a homeowners insurance cover legal fees to defend the homeowner from wrongful accusation for “embezzlement”… thanks

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Oct 12, 2011

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Insurance Question from Rancho Santa Margarita, CA

Asked on 10/12/2011

Will the personal liability in a homeowners insurance cover legal fees to defend the homeowner from wrongful accusation for “embezzlement”… thanks NULL

Answer given on October 14, 2011

Homeowner policies provide personal liability protection and pays for legal fees for defense of covered losses. However, the policy covers for personal issues, not business related losses. If the embezzlement accusation is related to your occupation or business, then the homeowner policy will not defend you.However, if the charge is personally related then they will work with you.Homeowner policies also do not cover their insureds for illegal activities. They may agree to defend but if you are found guilty, they may withdraw their defense and refuse to make any payments.You need to contact your agent or company and present a claim for the accusation. The adjuster will determine if there is coverage under the policy and will advise you how they will proceed. If they deny coverage, you should be sure you understand why they are denying coverage and see if there is an alternative or if you can work with them to provide defense.

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