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

Best Practices for Insurers to Reduce Exposure; Options for Policyholders When Insurer Rejects Settlement Demand

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


Conducted on Thursday, January 5, 2017
Recorded event now available


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

Description

Attempts to settle underlying claims are often the source of disagreement and dispute between the policyholder and its insurer. When an insurer fails to accept a reasonable settlement offered by an injured party, the policyholder is at risk that the ultimate verdict will exceed the policy limits. The insurer 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 the tactics commonly used and the options available to each side. Under some circumstances, an insurer may be justified in rejecting a settlement demand. In other circumstances, the policyholder is entitled to settle without its insurer’s consent and may sue the insurer for bad faith.

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

Outline

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

Benefits

The panel will review these and other key issues:

  • What is the scope of an insurer’s duty to defend and duty to settle?
  • What are the key factors for insurers 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 insurers take to reduce exposure to bad faith litigation?
  • What options are available to policyholders who disagree with the insurer’s decision not to settle within the policy limits?

Faculty

Brian D. McDonald, Partner
Jones Day, San Francisco

Mr. McDonald is an Insurance Recovery partner in Jones Day's San Francisco office.  He has counseled policyholder clients in numerous major coverage actions and has helped clients secure hundreds of millions of dollars in insurance recoveries for extraordinary losses.  Brian also advises clients on the design, negotiation and purchase of insurance programs.  He represents and counsels policyholders relating to a broad array of insurance lines, including cyberinsurance, directors and officers, commercial general liability, property and business interruption, errors and omissions, environmental and umbrella/excess insurance.

Johanna W. Clark, Shareholder
Carlton Fields Jorden Burt, Orlando, Fla.

Ms. Clark defends companies in both state and federal courts in class actions, insurance bad faith litigation, insurance coverage disputes, malicious prosecution litigation, ERISA disability litigation, product liability litigation, general commercial litigation, and administrative housing discrimination claims. She has authored and presented on insurance bad faith claims.

Robert M. Horkovich, Managing Shareholder
Anderson Kill, New York

Mr. Horkovich focuses his practice on the area of insurance recovery. He has obtained over $5 billion in settlements and judgments from insurance companies for his clients over the past decade. He is a trial lawyer with substantial experience in trying complex insurance coverage actions on behalf of corporate policyholders and governmental entities.


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Insurance Law Advisory Board

John Broghammer

Partner

Greve Clifford Wengel & Paras

Tred Eyerly

Director

Damon Key Leong Kupchak Hastert

John D. Green

Partner

Farella Braun + Martel

Alan P. Jacobus

Lafayette & Kumagai

William E. Kelley, Jr.

Partner

Drewry Simmons Vornehm

William O. Krekstein

Partner

Timoney Knox

Jay M. Levin

Principal and Chair of the Insurance Recovery Practice

Offit Kurman

Peter J. Mintzer

Partner

Selman Breitman

Barry S. Neuman

Partner

Whiteford Taylor Preston

Andrew G. Wanger

Partner

Clyde & Co.

Britton D. Weimer

Partner

Weimer & Weeding

Sandra I. Weishart

Partner

Hinshaw & Culbertson

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