Insurer Bad Faith Setup Defense and Reverse Bad Faith Claims: Insurer vs. Policyholder Perspectives

Insurer Defenses Against Policyholders in Bad Faith Litigation

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

Conducted on Thursday, September 27, 2018

Recorded event now available

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Program Materials

This CLE webinar will prepare counsel to insurers and policyholders with an analysis of insurer defense trends in bad faith litigation based on wrongful conduct by the third-party plaintiff or first-party policyholder. Specifically, the panel will discuss “bad faith set-up” and fraudulent conduct or misrepresentation by the plaintiff, as well as insurer efforts to create an affirmative defense of reverse bad faith.


In defending bad faith claims, insurers are increasingly using various legal defenses to ensure that the court considers insured’s conduct when evaluating the conduct of the insurer. Allegations generally include failure to cooperate, failure to give proper notice of a claim, or fraud and misrepresentation.

A recent Pennsylvania federal court allowed an insurer to proceed with a “bad faith set-up” defense, giving ammunition to insurers alleging claimants employed bad faith set-up tactics solely to obtain punitive damages. At issue was an alleged unreasonably quick settlement deadline and delay tactics by the claimant.

Insurer “reverse bad faith” allegations that the plaintiff breached the covenant of good faith and fair dealing have had limited success by courts. However, there are some reported cases recognizing the claim, at least in dicta, and insurers continue to pursue the claims.

Listen as our authoritative panel of policyholder and insurer counsel discusses the latest litigation trends in defenses raised by insurers in bad faith litigation that focus on the alleged wrongful conduct of the claimant. The panel will cover bad faith set-up, fraud or misrepresentation by the claimant, and the affirmative defense of reverse bad faith.



  1. Trends in defenses to bad faith claims focusing on claimant’s conduct
    1. Bad faith set-up
    2. Fraud or misrepresentation
    3. Other defenses or strategies
  2. Trends in “reverse bad faith” as an affirmative defense
  3. Best practices for policyholders and claimants to counter these defenses
  4. Best practices for insurers in raising and proving these defenses


The panel will review these and other relevant issues:

  • What conduct by claimants generally gives rise to a bad faith set-up defense and how have courts treated this defense?
  • What types of conduct by the policyholder or claimant are typically raised as a bad faith action?
  • In what circumstances have insurers pursued the doctrine of reverse bad faith and how have the courts treated these arguments?


Garbowski, Mark
Mark Garbowski

Anderson Kill

Mr. Garbowski's practice concentrates on insurance recovery, exclusively on behalf of policyholders, with...  |  Read More

Koepff, Paul
Paul R. Koepff

Clyde & Co US

Mr. Koepff handles insurance coverage and reinsurance disputes, litigating various kinds of insurance and...  |  Read More

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