When adversity strikes, insurance claims emerge as an indispensable lifeline for policyholders and a paramount responsibility for insurance adjusters. However, comprehending the intricacies of insurance policies and navigating the claims process can be a complex and frequently stressful endeavor for both parties.
Bad faith litigation remains complex and risky due to unprecedented legal developments and challenges that continue to emerge. Recent court rulings highlight how insurance companies can still be accountable for bad faith if they unreasonably refuse to pay a legitimate claim or settle a third-party claim or lawsuit and the policyholder wins at trial. As the evolving regulatory landscape continues to bring new issues that could affect how “bad faith” applies in future cases, insurers should stay informed to effectively manage their business operations in compliance with legal requirements. On the policyholder side, certain states recognize “reverse bad faith” as a cause of action assertable by insurers, and in other states insurers can assert the insured’s bad faith or misconduct as an affirmative defense to bad faith claims. The speakers will address issues policyholders might face in these jurisdictions.
New and emerging technologies continue to bring opportunities to the insurance services sector. Besides enhancing actuarial and underwriting processes, insurtech is also a cost-effective way for insurance companies to launch new product developments and improve customer experience.
The past months have seen a rise in new insurance coverage and bad faith filings. Notably, a significant number of claims filed at both federal and state courts were dismissed favoring insurers due to the lack of "direct physical loss or damage" to property. In the recent McNamara v. Government Employees Insurance decision, the U.S. Court of Appeals for the Eleventh Circuit reversed the Florida district court’s decision dismissing the bad faith claim. The Eleventh Circuit held that “consent judgment is the ‘functional equivalent’ of an excess judgment that permits the insured to proceed against the insurer for bad faith.”
Subrogation is the legal right of an insurer to recoup the amount of insurance claim it paid to a policyholder by suing the party responsible for the damages. However, many insurance companies miss the opportunities offered by subrogation as they often neglect to pursue their right, or they do so, but with ineffective subrogation practices.
Depositions are a crucial part of the pre-trial discovery in insurance coverage and bad faith litigation. It also involves nuances distinctive to insurance law, such as the legal complexities brought by Rule 30(b)(6), which litigators need to be well-versed in. Successful management of litigation deponents is a significant step to prevailing in the case, hence, thoughtful strategies need to be put in place.
An insurer’s ability to refuse a settlement case is only limited on account to its duty to act in good faith. Instead, they owe its policyholder a duty to settle if, and only if, the policyholder’s settlement amount is within the limit of the insurer's policy.
Claim handler's depositions play a significant role in insurance coverage disputes. However, these types of disputes often include several underlying factors that the use of credible witnesses and experts, and the preparation of depositions become prone to risks and damages.
The deposition of a claim handler is very significant to an insurance coverage dispute, especially in the field where there are bad faith allegations.
Over the last several years, there had been a surge of bad faith insurance lawsuits in the U.S. Policyholders would typically use bad faith claims and extra-contractual allegations against their insurers in high-stakes risk litigations as seen in previous cases.
The COVID-19 pandemic is drastically affecting today’s global economy. Because of temporary closures and disrupted supply chains and sales, businesses today are confronted with profound income losses. This fallout has prompted an upsurge in business interruption insurance claims. Whether standard commercial policies provide coverage for virus-related income loss is hotly contested, however. Likelihood of recovery on such claims will depend on the terms and conditions of individual policies, as well as ongoing developments in litigation and legislation.
Since the onset of shutdown orders due to COVID-19, business owners have turned to their insurance policies to seek coverage for lost revenue and other pandemic-induced expenses. Insurers have generally denied business interruption coverage to these claims, referring to policy requirements for direct physical loss. Policyholders have brought their claims to the courts and, in most cases, judges have ruled in favor of the insurers. However, this trend is expected to change as plaintiffs start to find the weaknesses of the defendants’ arguments.
The representations and warranties insurance (RWI) market continues to rapidly evolve as it responds to the ongoing pandemic. A number of RWI trends have started to emerge including the classification of the current crisis as a heightened due diligence area and the standardization of COVID-19 exclusions. More significantly, several other issues are yet to arise as the health crisis continues to unfold.
Today's business landscape has been significantly confronted with profound economic disruptions and income losses due to the impact of the COVID-19 pandemic. These disruptions have made business interruption insurance a standard component for several business sectors seeking assistance in recovering lost revenue amid the crisis.
