Bad Faith Claims When Verdicts Exceed Policy Limits: Navigating Nuances of the Insurance Company's Duty to Settle

Best Practices for Insurance Companies to Reduce Exposure; Options for Policyholders When Insurance Company Rejects Settlement Demand

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, January 25, 2018

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with a review of the rights and obligations of the policyholder and the insurance company regarding settlement, the insurance company’s liability for verdicts in excess of policy limits, actions insurance companies can take to reduce exposure to bad faith claims, and options for policyholders if the insurance company rejects a settlement demand.

Description

Policyholders and insurance companies often disagree during settlement negotiations involving underlying claims. When an insurance company fails to accept a reasonable settlement offered by an injured party, and the ultimate verdict exceeds policy limits, the insured may face personal liability. The insurance company faces a separate risk—exposure to bad faith claims and liability for the entire amount of the judgment.

Navigating these scenarios requires a detailed understanding of the scope of the duty to settle. Counsel must understand tactics commonly used and options available to each side. Though an insurance company may be justified in rejecting a settlement demand, the policyholder may settle without its insurance company’s consent and sue the insurance company for bad faith.

Listen as our authoritative panel of insurance practitioners discusses the rights and obligations of the policyholder and the insurance company regarding settlement, the insurance company’s liability for verdicts in excess of policy limits, actions insurance companies can take to reduce exposure to bad faith claims, and options for policyholders if the insurance company rejects a settlement demand.

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Outline

  1. Scope of an insurance company’s duty to defend and duty to settle
  2. Insurance Company’s risk of claims for bad faith litigation
  3. Policyholder remedies when the insurance company breaches its duty to settle
  4. Best practices for insurance companies to reduce exposure to bad faith litigation, including identifying the bad faith set up
  5. Options for policyholders when the insurance company does not want to settle

Benefits

The panel will review these and other key issues:

  • What is the scope of an insurance company’s duty to defend and duty to settle?
  • What are the key factors for insurance companies when deciding whether to settle within the policy limits?
  • What factors do courts typically consider in deciding whether a particular settlement demand is reasonable?
  • What steps can insurance companies take to reduce exposure to bad faith litigation?
  • What options are available to policyholders who disagree with the insurance company’s decision not to settle within the policy limits?

Faculty

Clark, Johanna
Johanna W. Clark

Co-Managing Shareholder
Carlton Fields Jorden Burt

Ms. Clark defends companies in both state and federal courts in class actions, insurance bad faith litigation,...  |  Read More

Hirsch, Craig
Craig M. Hirsch

Of Counsel
Jones Day

Mr. Hirsch has assisted institutional policyholders and individual insureds over the past decade to recover millions of...  |  Read More

Horkovich, Robert
Robert M. Horkovich

Managing Shareholder
Anderson Kill

Mr. Horkovich focuses his practice on the area of insurance recovery. He has obtained over $5 billion in...  |  Read More

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