Bad Faith Insurance Litigation Claims: Identifying Risks and How to Mitigate Them
Most insurance policies have at least two liability-related assurance by the insurer: the duty to indemnify and the duty to defend. Bad faith occurs when an insurance company breaches these duties without reasonable basis. To avoid potential risks and exposures from bad faith claims, it is critical that insurers take certain steps that will not compromise their rights and responsibilities if a coverage dispute occur.
In this LIVE Webcast, a panel of thought leaders and practitioners assembled by The Knowledge Group will discuss the risks for insurers on a bad faith insurance litigation claim. The speakers will help the audience recognize and mitigate these potential risks.
Key topics include:
- Introduction to Bad Faith Claims
- The Insurer's Duties to Indemnify and to Defend
- Termination of the Duty to Defend
- Reservation of Rights and Declaratory Judgment Actions
- Strategies in Defending a Bad Faith Suit
- Implications and Damages of Insurance Bad Faith Claims
Timothy D. Lake, Partner
Tharpe & Howell, LLP
“REAL WORLD” EXAMPLES OF CLAIM HANDLING RISKS
- Avoiding “bad faith” risks at the claim handling stage
- Anticipation of coverage contentions
- Unfamiliar policy provisions or law
- Strategies in defending bad faith cases
- Adequate documentation of claim files
- Asset disclosures in time/policy limit demands
- Obtain adequate proof of a “genuine dispute” defense
- Strategies for using experts in bad faith cases
- Defense subject to a reservation of rights avoids bad faith risks
- Damages recoverable in bad faith cases
Lisa Kralik Hansen, Member
Cochran, Davis & Associates, P.C.
- What can create bad faith liability in the first party context?
- What is a first party claim? Property, fire, disability, health, life; UM, UIM, Med Pay and collision coverage in auto policies
- The roles of the independent adjuster, public adjuster, etc.
- Policy benefits need to be due and owing, withheld without proper cause, not paid in full or in time
- Denial of coverage – never without risk; reasonableness standard (may be covered by others, so may be duplicative)
- Rescission or declaratory relief – without good cause
- Fair Claims Practices regulations and statutory unfair claims settlement practices – time to acknowledge claim; pay in whole or in part
- Claim investigation – duties, how to avoid breach of the implied covenant
- Delay – how it can be used to support bad faith, can it be explained, how to avoid
- Communication – the importance of it, how often, be honest
- Notifications to the insured – suit limitation provision, statute of limitations
- Use of the Genuine Dispute Doctrine – when it applies; how is it used
Example: Property loss due to fire in high-end residential property; insured has public adjuster who hired Contractor ABC to provide repair estimate of $1 million; insurer as part of its investigation hired Contract XYZ who had similar scope of repair, but with lower cost of $650,000. Can the insurer avoid bad faith liability by issuing payment of $650,000?
- Post-claims underwriting – what is it, how to avoid it
- Key documents to understanding the first party claim and avoiding bad faith
- ACORD loss notice forms
- Claim file and electronic claim notes
- Proof of Loss
- Underwriting File
- Broker file(s)
- Internal policies and procedures
- Importance of good chronology – in both claim handling and in defending any bad faith lawsuit
Robert D. Laurie, Partner
Seiger Gfeller Laurie LLP
Bad Faith in Casualty Claims
- The Duty to Defend
- Make sure your adjuster’s analysis of liability is in line with defense counsel, if possible.
- Use Personal Counsel to your advantage
- Ensure the tri-partite sharing of information
- When in doubt – provide a defense
- The Duty to Investigate
- Investigations must be reasonable
- Don’t pit your adjuster against a medical expert
- Be thorough and comprehensive, with an eye toward a potential bad faith claim
- The Duty to Settle
- Don’t get stuck in the trap
- Document your requests for contribution
- Use personal counsel to your advantage
Who Should Attend:
- Insurance Lawyers
- Claims Counsel
- Insurance Companies
- In-House Counsel
- Legal Advisers
- Other related/interested Professionals and Organizations
TIMOTHY D. LAKE is a Partner of the Firm in its Sherman Oaks, California, office and is Chair of the Insurance Coverage and Bad Faith Practice Group. Mr. Lake also serves as a member of the California State Bar Insurance Law Committee, and the Claims and Litigation Management Alliance Insurance Coverage Litigation Committee. He has authored numerous publications on insurance coverage related topics and has been an invited guest speaker at numerous events in the insurance industry.
Mr. Lake also serves as coverage counsel for a nationwide insurance company for which he recently wrote and prepared new edition of insurance policies for all types of construction and service contractors, a policy for home inspectors, and for which he prepares special manuscript endorsements and provisions.
Mr. Lake also serves as coverage counsel for several nationwide insurance companies for which he has drafted revised editions of insurance policies involving commercial general liability coverage, commercial transportation coverage, homeowner property and liability coverage, as well as special manuscript endorsements and provisions. In his role as coverage counsel, Mr. Lake provides coverage opinions to insurer clients and assists in coverage determinations involving commercial general liability, commercial transportation, homeowner property and liability insurance claims.
TIMOTHY D. LAKE is a Partner of the Firm in its Sherman Oaks, California, office and is Chair of the …
Lisa Kralik Hansen has over 25 years of experience defending insurance companies, program administrators, third party administrators and insurance brokers in matters involving various aspects of insurance coverage and bad faith. Ms. Hansen has defended numerous first and third party bad faith cases for domestic insurers and the London market, in both California state and federal courts. While her practice is focused on California law, Ms. Hansen also advises insurers on coverage issues and bad faith exposure on a national basis. Ms. Hansen is also an experienced appellate practitioner. Ms. Hansen has been selected a Southern California Super Lawyer in Insurance Coverage for the years 2014 through 2017.
Lisa Kralik Hansen has over 25 years of experience defending insurance companies, program administrators, third party administrators and insurance brokers …
Bob is a commercial litigator and business advisor with a broad background, particularly in the areas of financial services, manufacturing, life sciences and aviation. Bob is an experienced trial lawyer who has appeared before courts and arbitration panels throughout the United States and in various international proceedings.
Bob regularly advises domestic and international insurance and reinsurance companies on complex commercial matters. He represents insurers in disputes concerning insurance coverage determinations, bad faith/extra-contractual claims, life insurance and related financial products. He has also litigated and arbitrated numerous facultative and treaty reinsurance disputes concerning fraud, contract wording, commutations, allocation, aggregation, number of occurrences, rescission, offset, pre-hearing security and insolvency.
Bob also advises clients on the construction and wording of various types of insurance and reinsurance agreements, with a particular focus on policy wording for cyber insurance products. Bob enjoys advising clients relating to intricate insurance products and facilities and he frequently provides due diligence and transactional assistance to a lending institution for insurance-related loan transactions.
He also frequently represents clients in a broad range of commercial litigation, including commercial contract disputes, commercial fraud, shareholder and partnership disputes, professional liability and product liability. Bob has also defended clients against tort claims involving aviation accidents, premises liability and sports and recreation facilities.
Bob enjoys assisting clients with business formation, contract drafting and risk management issues, including drafting lease, license, non-compete and distribution agreements. He has helped form many start-up businesses and routinely advises corporate clients as to various aspects of their business.
Bob previously served on the Executive Committee of the Insurance Committee of the International Bar Association. He is also a frequent publisher and speaker on topics relating to commercial litigation and the insurance and reinsurance industry.
Bob was named as a New England Super Lawyer® 2013-2016 in the practice areas of insurance coverage litigation.
Outside of the law, Bob serves on the Governance and Finance Committee of The Bridge Family Center, a non-profit organization that provides community-based programs, residential services, youth services, child-parent support, mental health counseling and art and recreational programs for children and families in Connecticut. In addition, Bob has many interests, including surfing, hiking, running and spending time with his wife, two daughters, son, and “Newfie” dogs.
Bob is a commercial litigator and business advisor with a broad background, particularly in the areas of financial services, manufacturing, …
Print and review course materials
Method of Presentation:
Experience in bad faith litigation
NASBA Field of Study:
Specialized Knowledge - Technical
NY Category of CLE Credit:
Areas of Professional Practice
Unlock All The Knowledge and Credit You Need
Leading Provider of Online Continuing Education
It's As Easy as 1, 2, 3
Get Your 1-Year All Access Pass For Only $199
About Tharpe & Howell, LLP
Tharpe & Howell, LLP is an AV rated insurance defense firm. The firm has 8 partners who practice law in the areas of employment litigation, construction defects, general liability, insurance coverage and litigation, workers compensation and transportation. The firm was formed in 1977 and has approximately 55 attorneys presently.
About Cochran, Davis & Associates, P.C.
Cochran, Davis & Associates, P.C. is a California-based civil litigation firm that works with domestic and London market insurers on a wide range of insurance policies and programs.
About Seiger Gfeller Laurie LLP
Seiger Gfeller Laurie (“SGL”) is a boutique law firm comprised of litigators from some of the largest law firms in the United States. SGL provides litigation and counseling to clients in a broad array of markets, including financial services, sports and recreation and manufacturing, including medical devices. Among other clients, SGL is national or regional counsel to a number of insurance companies, including life, health and property and casualty. SGL attorneys have significant experience in coverage and claims litigation and advice, ranging from coverage determinations, claims handling and defense of claims (including trial and appeals) to coverage and bad faith litigation. SGL attorneys have represented insurance companies in some of the highest-profile insurance coverage disputes, including disputes arising from the September 11th attacks on the World Trade Center and the Central Artery / Tunnel Project (“Big Dig”) in Boston, Massachusetts. SGL has commenced and defended declaratory judgment actions (and arbitrations) in numerous jurisdictions across the U.S. and in a wide scope of product lines. SGL attorneys also regularly assist domestic and international insurance companies with regulatory compliance, product development, risk management and policy construction.