Venue Matters: Evaluating the Applicable Standard for Bad Faith Claims in New York

The insurance market has a strong interest in minimizing extra-contractual claims against it. These issues are often decided summarily at the pre-answer motion to dismiss stage or after discovery on summary judgment. Notably, however, since 2018, New York courts have articulated varying standards in evaluating a policyholder’s claim for breach of the implied covenant of good faith seeking consequential damages against its insurer in the context of these motions. Insurers have traditionally defended themselves against these extra-contractual claims by advancing
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Consent Judgments are not Excess Judgments: The Eleventh Circuit Emphasizes the Excess Judgment Rule in Context of Bad Faith

As a general rule, Florida law imposes a duty of good faith on insurers to defend claims against insureds and to settle those claims where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. An insured may, rightly or wrongly, claim an insurer’s conduct in handling a claim falls short of that standard of care. But a claim for bad faith will not accrue until the alleged claims handling results in liability that
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No Privilege for Communications Between Insurance Adjuster and In-House Counsel

Courts around the country continue to refine the scope of the attorney-client privilege and the attorney work-product doctrine in the context of communications between an insurance company adjuster and the insurer’s in-house counsel. Recently, the United States District Court for the District of Colorado held that a claims adjuster’s emails, claim notes, and interoffice memoranda are not privileged, even though they involved the carrier’s in-house attorney. Olsen v. Owners Ins. Co., No. 18-CV-1665-RM-NYW, 2019 WL 2502201 (D. Colo. June 17,
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Eleventh Circuit Holds that Referencing Sealed Documents is Not Proper Notice

The Eleventh Circuit upheld a win for the insurer under a claims-made-and-reported policy in Crowley Mar. Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, No. 18-10953, 2019 WL 3294003 (11th Cir. July 23, 2019), finding that the insured did not provide timely notice. In so holding, the court rejected the insured’s argument that it provided timely notice by sending a letter to the insurer referencing an affidavit which the insured claimed alleged wrongful conduct against the insured, but was sealed, preventing the insurer from confirming the insured’s claim for
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AD&D Policy Beneficiaries’ Recovery Limited To Death Benefits — No Recovery for Dismemberment Injuries Leading To Death

In Malbrough v. Kanawha Insurance Co., 2015 U.S. Dist. LEXIS 48394 (W.D. La. Apr. 9, 2015), the U.S. District Court for the Western District of Louisiana was asked to determine the benefit payable to the plaintiff beneficiaries under an Accidental Death and Dismemberment insurance policy issued by Kanawha. The court held in favor of the insurers, ruling that the beneficiaries were limited to death benefits only, and not to additional benefits relating to the loss of the decedent’s foot. Following
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Wisconsin Federal District Court Chides Insurers for Inaction, Deems Insurers Estopped from Asserting Their Right To Defend

In Haley v. Kolbe & Kolbe Millwork Co., Inc., No. 14-cv-99-bbc, 2015 U.S. Dist. LEXIS 42584 (W.D. Wis. Apr. 1, 2015) the U.S. District Court for the Western District of Wisconsin granted summary judgment in favor of the insured, Kolbe & Kolbe Millwork Co. (Kolbe), holding that Fireman’s Fund Insurance Company and United States Fire Insurance Company (collectively the “insurers”) were estopped from having the right to select counsel to represent Kolbe in a class action lawsuit alleging the sale of
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Bad News for Insurers: Groundless Claims Must Be Defended

Illinois Tool Works Inc. et al. v. Travelers Casualty & Surety Co. et al., Circuit Court of Cook County, Illinois In this insurance coverage action from the Circuit Court of Illinois, the plaintiffs, Illinois Tool Works, Inc. and ITW Finishing LLC (ITW) brought action against their insurers Travelers Casualty & Surety Co., the Travelers Indemnity Co. of Connecticut and Century Indemnity Co., (defendants) for insurance coverage in thousands of underlying toxic tort claims allegedly arising from exposure to harmful chemicals
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