If you have the possibility of insurance coverage, it is imperative that you tender the defense of the unlimited jurisdiction lawsuit to your insurance carrier immediately. Under California law, the insurance company must either defend and indemnify you, or tell you in writing why there is no insurance coverage or that the carrier is defending you under a reservation of rights.
There is no jail time for losing a civil lawsuit.
If you do absolutely nothing, there WILL be a default judgment against you, which will affect your credit and future ability in the business world. Ultimately, you may need to file for bankruptcy.
Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.
If you had insurance at the time of the loss, you have those coverages. If you are no longer insured by that company, it does not matter. As long as the insurance was in force at the time of the loss. As previously mentioned, get the lawsuit papers to your insurance carrier. You have an obligation to cooperate in your defense (pursuant to your insurance agreement). If you do not do this, the insurance carrier may claim you have prejudiced their rights of defense or failed to abide by the insurance agreement. As part of your insurance agreement, the insurance carrier pays for your defense and any damages claimed up to the policy limits or as set forth in the policy.
Since you apparently have insurance, your insurance carrier will defend and indemnify you, up to the limit of your liability coverage. You have a duty and a responsibility to inform your insurance company and cooperate with their defense of you. Once an attorney is assigned by your insurance company to defend you, you should schedule a face-to-face meeting with your attorney to discuss your possible exposure to an "excess verdict". Your attorney can guide you on your particular situation. While your insurance company pays for this attorney, his or her duty is to represent you and provide you with information. That is why you pay a premium.
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Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.