National Insurance Law Forum

National Insurance Law Forum

Published By The Attorneys of the National Insurance Law Forum

Tag Archives: bad faith


Posted in Duty to Defend
Defending under a policy with a wasting limit is rife with pitfalls for both the insurer and defense counsel.  Provisions that transform a policy into a “wasting limits policy” often appear in professional liability policies, drop-down coverage situations, and excess policies. Policies with such wasting limits provisions go by many names: wasting, eroding, burning, exhausting,… Continue Reading

Xia v. ProBuilders Specialty

Posted in Bad Faith/Extra Contractual, Liability Coverage, Recent Cases
Insurers should be aware of the recent Washington State Supreme Court decision in Xia v. ProBuilders Specialty, No. 92436-8 ___ Wn.2d ____ (2017) handed down on April 27, 2017. The decision may have significant impacts not only in coverage litigation regarding environmental contamination, but across a broad spectrum of liability claims under CGL policies. In short, the Washington State Supreme Court… Continue Reading

When Does The Statute of Limitations For An Insurer’s Failure to Settle Run?

Posted in Bad Faith/Extra Contractual
Although bad faith lawsuits against liability insurers for failing to settle within policy limits are all too common, there is significantly less case law addressing the issue of when such a cause of action accrues and, in particular, whether bad faith suits filed years after the fact may therefore be time-barred by applicable state statutes… Continue Reading

Hawai’i declines to adopt Cedell, for now . . .

Posted in Uncategorized
It has been more than two years since Washington’s Supreme Court issued its opinion in Cedell v. Farmers Ins. Co. of Washington, 176 Wash.2d 686, 295 P.3d 239 (2013), radically changing the attorney-client privilege for insurers in Washington. In Cedell, the court held that there is a presumption of no attorney-client privilege in “first party… Continue Reading

Policyholder’s Claim against Insurer for Consequential Damages Survives Motion for Summary Dismissal

Posted in Bad Faith/Extra Contractual
In Mutual Association Administrators, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, a New York appellate court affirmed a lower court order denying summary dismissal of a claim for consequential damages against an insurer arising from an alleged breach of the insurer’s obligation to defend and indemnify its policyholder in an underlying ERISA… Continue Reading

Obstacles to Class Actions on Insurance Matters

Posted in Bad Faith/Extra Contractual
Typically class actions and claims for insurance bad faith do not mix. This is for the simple reason that insurance bad faith actions usually involve individualized facts, individualized policies and separate claims handling. Uniform claims, therefore, are less prevalent in insurance bad faith, and thus less likely to satisfy the class action requirements under Civil Rule 23(a) of numerosity, commonality, typicality and adequate representation. However, class actions can nevertheless play a role in insurance bad faith claims and insurance coverage cases.… Continue Reading

New Consequences For Failing to Defend in West Virginia?

Posted in Bad Faith/Extra Contractual
The federal Fourth Circuit, which has historically had a reputation as being among the more conservative jurisdictions with respect to insurance coverage issues, has issued an unpublished opinion, declaring for the first time that policy holders may recover damages for “aggravation” and “inconvenience” resulting from the refusal of an insurer to provide a defense owed under… Continue Reading

SJC Drops The Hammer On MA Bad Faith Claims

Posted in Bad Faith/Extra Contractual
Massachusetts is one of a handful of states that allow third party claimants to sue liability insurers for failing to promptly settle their claims.  It is unique in allowing tort claimants to recover punitive damages in such cases.   In the wake of the Supreme Judicial Court’s ruling this week in Rhodes v. AIG Domestic Claims it is evident… Continue Reading

New Rules For Discovery In Florida

Posted in Bad Faith/Extra Contractual
There hasn’t been much good news from Florida lately, particularly in the area of bad faith litigation.  In a rare bright note, however, the Florida Supreme Court has declared that the liberal rules that it adopted a few years ago requiring disclosure of work product in first party bad faith cases does not apply with respect to… Continue Reading

Washington Appellate Court Rules Insurer Who Denied Coverage May Not Assert Impairment Of Subrogation Rights, Remands On Efficient Proximate Cause Of Damage

Posted in Recent Cases
In Vision One, LLC v. Philadelphia Indemnity Ins. Co., 2010 Wash. App. LEXIS 2322 (October 19, 2010), the Washington Court of Appeals affirmed the trial court’s ruling that an insurer who denies coverage is estopped from arguing the insured impaired its subrogation rights, but reversed and remanded on the issued of the efficient proximate cause… Continue Reading

Denial of Coverage For Ponzi Claim Not Bad Faith

Posted in Liability Coverage
A recent opinion of the U.S. Court of Appeals for the Third Circuit has emphasized the general rule that an insurer’s failure to follow its own internal procedures does not necessarily equate to bad faith. In Smith v. Continental Cas. Co., No. 08-4140 (3rd Cir. October 8, 2009), Continental Casualty’s insureds were sued for marketing… Continue Reading

The Supreme Court of Washington Clarifies “Bad Faith” and Consumer Protection Act Claims

Posted in Recent Cases
The Supreme Court of Washington’s recent decision in St. Paul Fire and Marine Ins. Co. v. Onvia, Inc., 2008 Wash. LEXIS 1055 (November 26, 2008) addressed two claims commonly alleged against insurers in coverage disputes: “bad faith” and violation of the Consumer Protection Act. The matter reached the Court upon certified questions from the United… Continue Reading

Court Finds Insurers’ Inadequate Investigation was Bad Faith, Imposes Coverage by Estoppel

Posted in Recent Cases
In Aecon Bldgs., Inc. v. Zurich, et al., 2008 U.S. Dist. LEXIS 59515 (W. D. Wash.) (August 4, 2008), the Western District of Washington held two insurers liable for bad faith as a matter of law for inadequately investigating a construction defect claim before denying the claim, which was not covered. The two insurers insured… Continue Reading

PIP Insurer Required to Defend Process for Denying Claims

Posted in Bad Faith/Extra Contractual
Oregon courts have consistently held that an insurance company may only be liable for tortuous bad faith in situations where it is defending its insured.  In Ivanov v. Farmers Insurance Company of Oregon, the Oregon Supreme Court addressed an insurer’s obligations under personal injury protection (PIP) coverage.  The decision itself addresses an insurer’s obligation to… Continue Reading

Minnesota Senate Trims Back Proposed Bad Faith Legislation

Posted in Bad Faith/Extra Contractual, Legislation
The Minnesota Senate has approved bad faith legislation albeit only after significant insurance industry lobbying ameliorated some of the more onerous provisions of the original proposal. As originally drafted, SF 2822, an insurer would be deemed to be acting in good faith unless the policyholder could prove the absence of a reasonable basis for denying benefits and that… Continue Reading

Sixth Circuit Affirms Dismissal of Coverage Case on Basis of Pollution Exclusion

Posted in Recent Cases
This coverage case arose from an underlying case brought against the policyholder for violation of CERCLA for the policyholder’s alleged “contamination of two Superfund sites in eastern Arkansas.” The policyholder filed suit against the Pennsylvania Manufacturers’ Association Insurance Company ("PMA") seeking coverage under several insurance policies allegedly issued from 1967 to 1978 and alleging that… Continue Reading

Washington State Voters Approve the Insurance Fair Conduct Act

Posted in Bad Faith/Extra Contractual
The Seattle Times is reporting this morning that Referendum 67 was approved by voters by a margin of 57% to 43% in Tuesday’s election. As we have previously reported, the Referendum allows the unprecedented remedy of uncapped treble damages awarded at the discretion of the trial court for “unreasonable” denials of claims for coverage or payment of… Continue Reading