Bad Faith Update

Vol. September Issue Risky Business Denying a Defense May Turn Out Disastrous

Traditional liability policies contain two general duties. The duty to defend and the duty to indemnify. These are related but differ in scope and timing. The duty to indemnify is triggered later and does not ripen until a jud...

Vol. August Issue Dictionary Dooms Denying Carrier

Liability insurance policies are designed to provide protection for insureds as well as compensation for injured parties. Most jurisdictions require courts to interpret policies to afford broad coverage and to construe exclusi...

Vol. July Issue Settling With House (The Insured's) Money

Insurer Controls Settlement Within Deductible

With limited exceptions, liability insurance policies grant exclusive discretion to the insurer to settle cases as they see fit. This makes sense given that the insurer is ty...

Vol. June Issue Auto Exclusion Not So Absolute

It is no surprise that CGL policies exclude coverage for bodily injuries caused by the operation of cars or trucks. Automobile risks and business premises risks are vastly different. Absent a concurrent and covered cause, if a...

Vol. May Issue Additional Insureds, Additional Coverage

While the named insured under a liability policy is obviously entitled to certain coverages under their liability policy, additional entities will often qualify for coverage under the policy depending on how “insured&rdq...

Vol. April Issue Stays Go Both Ways Federal Court Halts Coverage Action Pending Tort Resolution

Carrier requests for stays have been all the rage recently with a recent Missouri decision granting an insurer the ability to intervene into tort lawsuits to seek a stay until the insurer litigates a coverage action. Read More

Vol. March Issue Fifth Circuit Calls Foul on Misuse of Federal DJ

Insurers routinely turn to Federal declaratory judgment actions in an effort to secure what they perceive as a friendly forum. Doing so can be appropriate in certain circumstances when an actual coverage dispute is present and the reques...

Vol. February Issue Defending Without Reserving A Daring Decision

When faced with claims that may not be covered, an insurer can take a number of paths.  This includes denying coverage, defending under a reservation or defending under a reserva...

Vol. January Issue A Right to Intervene but Nothing More

Deny, Delay, and Defend is a common theme around the insurance industry and is often cited to explain an insurer’s reluctance to pay claims.  Books have been written on the...

Vol. December Issue No Definitive Settlement Terms, No Bad Faith

Most, but not all, extra-contractual cases involve an insurer failing to accept an offer that would have protected an insured from an excess judgment. Frequently, the insurer will raise some challenge to the offer made by the claimant. T...

Vol. October Issue Buffet Of Bad Faith Issues

Standards for extra-contractual recovery vary from state to state to some extent. While the standard for recovery may differ, evidentiary, discovery and interpretation issues overlap and arise in many bad faith cases regardles...

Vol. September Issue Retained Counsel Beware Insurer Tactics to Recover Excess Payments

Most jurisdictions, at least in theory, permit insureds to recover extra-contractual payments/judgments from their insurers under bad faith or negligence theories. Jurisdictions are less uniform on whether or under what theories an insur...

Vol. August Issue Written Settlement Demand Not Necessary

​With increasing frequency, insurers are challenging the sufficiency and clarity of settlement demands they failed to previously accept.  The insurer’s challenges can take many forms but most focus on a demand not being writte...

Vol. July Issue Carrier’s Failures Create Coverage

​Insurance laws may vary slightly between jurisdictions but major principles are nearly uniform. These include requirements that an insurer should draft clear and unambiguous exclusions and should identify and fully inform the insured of...

Vol. June Issue Interpleader Insufficient to Erase Extra-Contractual Exposure

In states that haven’t passed safe harbor legislation, multiple claimants and insufficient limit claims pose certain challenges to insurers in the claims handling stage.  Numerous claimants competing for severely limited polic...

Vol. May Issue No Direct Interest, No Intervention

Over the past five plus years, the Missouri legislature has continued to grant insurer’s new rights and protections. This includes requirements for time-limited demands, interpleader protections and the ability to intervene into ce...

Vol. April Issue No “Claim”, No Coverage

Claims Made and Reported policies are their own animal. Proper reporting of claims is vital to ensure coverage for any loss. Knowing what constitutes a "claim" that must be reported and when and how to report the claim can be challenging...

Vol. March Issue Obligations Extend Beyond Accepting Settlement Proposal

The vast majority of extra-contractual/bad faith cases involve a carrier’s failure to secure a release of an insured by accepting a reasonable settlement opportunity within the policy limits. The absence of a reasonable settlement ...

Vol. February Issue Covenant Not To Execute Does NOT Preclude Damages

Following a coverage denial, many jurisdictions permit insureds and claimants to enter into covenants not to execute and to enforce a resulting judgment against the insurer if coverage is shown to exist. Insurers often argue that the ins...

Vol. January Issue Unique Supplemental Payments Provision Leads to Supplemental Payday

Supplemental Payments provisions are present in almost every liability policy. These provisions generally detail the insurer’s responsibility for interest and costs awarded in suits that it has undertaken to defend. Litigation surr...