Insurer's Bad Faith Liability in the Absence of Coverage: First-Party and Third-Party Claims

Advocating or Defending Extra-Contractual Claims for Improper Claims Handling

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


Conducted on Wednesday, September 9, 2015

Recorded event now available

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Program Materials

This CLE webinar will discuss how an insurer’s actions in the claims handling process may result in bad faith liability in the absence of coverage. The program will also address how extra-contractual liability may arise from an insurer’s violation of fair claim handling statutes or its waiver of coverage defenses. It will discuss recent case law and regulations impacting an insurer’s exposure to extra-contractual liability for errors in the adjustment of first-party claims and in the investigation and defense of third-party claims.

Description

The more general rule that an insurer has no extra-contractual liability absent coverage has been gradually eroding. Recent case law developments have provided policyholders with some avenues to allege bad faith even when the claim is not covered under the policy. 

Some jurisdictions are more open to the argument that an insurer’s actions in responding to or handling a claim can give rise to bad faith liability even in the absence of coverage. With respect to first-party claims, courts will look at whether the insurer promptly and fairly investigated and adjusted the claim. For third-party claims, the risk is that the insurer will be found to have failed to properly respond to a request for a defense. 

Extra-contractual liability may also be premised on an insurer’s violation of fair claim handling practices, statutes and regulations. Finally, an insurer may open itself up to extra-contractual liability if it waives one or more coverage defenses.

Listen as our authoritative panel of insurance practitioners analyzes an insurer’s risk for extra-contractual liability for improper claims handling in the absence of coverage for the claims. The panel will review recent case law and regulations impacting an insurer’s exposure to bad faith liability in both first-party claims and third-party claims.

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Outline

  1. Theories of recovery for extra-contractual liability for uncovered claims
  2. Violations of statutes or regulations as a basis for extra-contractual liability
  3. Insurer’s waiver of coverage defenses as a basis for extra-contractual liability
  4. Extra-contractual liability in first-party vs. third-party claims
  5. Recent case law developments

Benefits

The panel will review these and other key issues:

  • How does the covenant of good faith and fair dealing play into the theories of extra-contractual liability in the absence of coverage?
  • In what circumstances can an insurer be held to have waived coverage defenses giving rise to bad faith liability for uncovered claims?
  • How do extra-contractual liability theories differ in first-party vs. third-party claims?

Faculty

David J. McMahon
David J. McMahon

Partner
Hinshaw & Culbertson

Mr. McMahon focuses his practice on high value attorney's fee cases as well as litigating large complex...  |  Read More

C. Zachary Ransel
C. Zachary Ransel

Shareholder
Fisher Kanaris

Mr. Ransel concentrates his practice in insurance coverage litigation involving first-party and bad faith claims. He...  |  Read More

David A. Shaneyfelt, Esq.
David A. Shaneyfelt, Esq.

The Alvarez Firm

Mr. Shaneyfelt has nearly 30 years of experience in litigation complex civil matters in state and federal courts across...  |  Read More

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