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Form and Substance: The Importance of Conducting a Proper Investigation of First-Party Claims Under California Law

A bad faith claim against an insurer often focuses as much on the process of a claims investigation as it does on the substance of a claims decision itself. If the coverage decision was wrong (but not unreasonable), and the investigation was thorough, there may be liability for breach of contract, but there is a reduced risk of liability for bad faith. In contrast, if the coverage decision was wrong, and the insurer also failed to investigate the claim properly, there is a heightened risk of bad faith. Because of this, a proper investigation of the claim is vital to preventing (or defeating) an insured’s bad faith claim. Egan v. Mutual of Omaha Insurance Company, 24 Cal.3d 809 (1979), is

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Insuring Fine Art: The Visual Artists Rights Act and Its Bad Faith Implications

Insuring fine art can present challenges that are not encountered with other types of property. One of these challenges involves the application of the Visual Artists Rights Act of 1990 (17 U.S.C. §106A) (“VARA”) when artwork by a living artist is damaged.   VARA protects an artist’s “moral” rights in his/her work of art beyond traditional property law – in other words, even after a piece of art is sold, the artist retains certain rights to make sure that the artwork is not impermissibly modified. VARA provides the author of a “work of visual art” the right to “prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and

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Colorado Supreme Court: Indefinite, Future Assignment of Insurance Proceeds Unenforceable Against Insurer

It is not uncommon for injured persons to assign their rights to insurance proceeds to a third party, and the enforceability of those assignments has been the subject of frequent litigation around the country.   In the most recent development on this topic, Allstate Ins. Co. v. Medical Lien Mgmt., 2015 CO 32, 2015 WL 3378141, 2015 Colo. LEXIS 447 (Colo., May 26, 2015), the Colorado Supreme Court held that an injured person’s assignment to a medical lien company was not enforceable against the insurance company. In Allstate, an individual, Martinez, was injured in a car accident with Allstate’s insured.  Martinez entered into an agreement with Medical Lien Management (MLM) in which MLM agreed to pay for Martinez’s medical treatment in

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Nevada Court Holds One-Year Suit Limitation Provision Does Not Bar Bad Faith or UCPA Claims

Property insurance policies commonly contain a suit limitation provision which generally provides that an insured cannot file suit against the insurer unless the action is brought within one or two years of the date of loss.  While such provisions are generally enforced throughout the country, jurisdictions vary on the type of claims that suit limitation bars.   Recently, in Queensridge Towers, LLC v. Allianz Global Risks U.S. Ins. Co., 2014 WL 7359093, 2014 U.S. Dist. LEXIS 177433 (D.Nev., Dec. 24, 2014), a district court in Nevada held that a one-year suit limitation provision applies only to breach of contract claims against the insurer and does not bar bad faith or UCPA claims. Plaintiff was the owner and developer of a condominium

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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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