Monthly Archives: December 2016

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Posted in Bad Faith

WHOSE SETTLEMENT IS IT, ANYWAY? NEGOTIATING CONSISTENT WITH AN INSURER’S STRONG COVERAGE DEFENSES

This author suggested, in an earlier May 2016 Bad Faith blog article, that an insurer can measure on a “strength scale” its insurance coverage defenses while it defends its insured against underlying claims and lawsuits under a reservation of rights. The “strength scale” of coverage defenses, especially when subject to ongoing updates, can become a useful decision-making tool during settlement negotiations. An insurer has a legitimate basis to assess its coverage defenses as part of the settlement process when the coverage issues may render it unclear whose money will be used to pay for a judgment or settlement: the insurer’s money, the insured’s money, or combined contributions of both. “Bad faith” case law can be scarce, in many jurisdictions, regarding

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First Circuit Provides Guidance as to When a Notice of Claim Triggers Policy Obligations

When does receipt of a pre-suit claim notice letter trigger an insurance carrier’s obligation to provide a defense and/or indemnity? In Sanders v. Phoenix Insurance Co., the First Circuit provided some guidance to this question, holding that a pre-suit notice letter would not trigger a carrier’s obligations unless a non-response would impact the policyholder’s ability to contest liability during a following proceeding. The Underlying Dispute Sanders arises from a “tragic tale of unrequited love.” Ms. Anderson hired an attorney to represent her in a divorce proceeding from Mr. Sanders, her husband. During the course of that representation, Ms. Anderson and her attorney began an affair. Ms. Anderson suffered from depression and anxiety. When the affair cooled, Ms. Anderson wrote a

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Don’t Get Burned by a “Holt Demand” in Georgia

Georgia has a very specific law called “Holt demands” concerning time-limited demands made against a liability insurance policy. In Southern General Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274 (1992), the Georgia Supreme Court held that where the insurer has full knowledge of the insured’s liability and damages exceeding policy limits, the insurer can be subject to bad faith damages if its failure to settle within policy limits subjects the insured to a judgment in excess of those limits. In deciding whether to settle a claim within policy limits, the insurer must give equal consideration to the interests of the insured. The Holt demand was later codified in a statute addressing only motor vehicle claims, at O.C.G.A. Section

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Posted in Bad Faith
Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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