The three companies, 1-800-GET-THIN, Top Surgeons and Beverly Hills Surgeon Center, are being sued for false advertising in a class-action lawsuit.
The insurance company, National Fire & Marine Insurance Co., however, is refusing to cover their legal expenses, because, the insurer alleges, the companies lied in their application for insurance about whether they had doctors on their staff who had been "restricted, suspended or revoked within the last five years."
The Los Angeles Times reported Saturday at least five doctors affiliated with the medical clinics had been disciplined by the Medical Board of California.
The legal case the insurer is not covering involves two women who died within days of undergoing Lap-Band surgery.
Marketing company 1-800-GET-THIN advertised the Lap-Band procedure extensively on radio, television and billboard ads, which led to 10,000 surgeries scheduled.
Allegedly, five people have died post-surgery due to complications, including one who died a year after the procedure that involves placing a silicone band around the stomach to prevent overeating.
Insurance law attorney Martin Checov in San Francisco said, "I've seen very few examples of insurance companies rescinding where it wasn't the case of a policyholder being caught red-handed in a lie."
Courts in California tend to side with policyholders, Checov said.