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South Carolina Code Does Not Invalidate Notice and Cooperation Clauses

In late July, the South Carolina Supreme Court handed down a helpful ruling for insurers when it held that, if an insured fails to give notice to his automobile insurer of a pending claim, the insurer may deny coverage above statutory limits upon a showing that it was substantially prejudiced by its insured’s failure to comply with the standard notice clause in the policy. Neumayer v. Philadelphia Indem. Ins. Co., — S.E.2d —, 2019 S.C. LEXIS 67, at *17 (S.C. July 24, 2019). The case involved a motor vehicle accident where a pedestrian, Andrew Neumayer, was struck by a bus driver, suffering severe injuries. Neumayer filed suit against the bus driver who then failed to answer the complaint, and after

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Posted in Bad Faith

South Carolina Federal District Court: Insurer May Act in Bad Faith by Considering Extrinsic Evidence to Deny Duty to Defend

On February 6, 2017, the United States District Court, District of South Carolina, found a genuine dispute of material fact existed as to whether a Roofing Limitation Endorsement in a liability policy barred the insurer’s duty to defend. Williford Roofing, Inc. v. Endurance Am. Specialty Ins. Co., 2017 WL 479507, at *3-4 (D.S.C. Feb. 6, 2017). Moreover, while an insurer’s defense obligations are “not strictly controlled by the complaint” under South Carolina law, evaluating the complaint is the insurer’s “first step.” Id. at *4. Here, the district court found the insurer skipped the first step and instead looked first to extrinsic evidence to “deny coverage altogether.” Id. As such, the court concluded the trier of fact could find the insurer

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Posted in Bad Faith

Insurers’ Beware: Defending Bad Faith Claim May Lead to Waiver of Privileged Communications

On July 27, 2016, the United States District Court for South Carolina ordered an insurer to turn over its privileged communications. The Court explained that the insurer waived the protections afforded under the attorney-client privilege and work product doctrine by asserting it acted in good faith in the defense of its insured. See State Farm Fire & Casualty Co., et al. v. Admiral Ins. Co., 2016 WL 4051271 (D. S.C. July 25, 2016). While this is a district court opinion and may be subject to appeal, insurers should still be cognizant of the issue. James McElveen filed suit after he was seriously injured during a fraternity hazing event hosted by Maurice Robinson and Phi Beta Sigma Fraternity. Robinson tendered the

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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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