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

Reducing Company Exposure; Options for Policyholders When Company Rejects Settlement Demand

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

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Conducted on Thursday, February 4, 2021

Recorded event now available

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Course Materials

This CLE course will provide counsel with a review of the rights and obligations of the policyholder and the insurance company regarding settlements and the company's liability for verdicts in excess of policy limits. The panel will also explain actions insurance companies can take to reduce exposure to bad faith claims and options for the policyholder if the 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 policyholder may face personal liability. The insurance company faces a separate risk--exposure to bad faith claims and liability for the entire 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 settlements and the insurer's liability for verdicts in excess of policy limits. The panel will also explain actions insurance companies can take to reduce exposure to bad faith claims and options for the policyholder if the company rejects a settlement demand.

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Outline

  1. The 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 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

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

Lissy, Jason
Jason B. Lissy
Partner
Jones Day

Mr. Lissy's practice focuses on insurance coverage, exclusively on behalf of policyholders, and other commercial...  |  Read More

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