Archives: Settlement

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Sandy and the New Jersey Department of Banking and Insurance

As the weeks following Sandy have stretched into months, and the months are beginning to stretch into years, businesses and homeowners with unresolved claims have been asking me whether it’s worthwhile to complain about their carrier to the New Jersey Department of Banking and Insurance (“DOBI”).  Truth be told, it’s a complete waste of time. … Continue Reading

Contribution claims between insurance companies

Settling complex insurance claims involving multiple carriers can be like playing three-dimensional chess. (Since I can’t even play one-dimensional chess, that means it’s really difficult.) I once had a multimillion-dollar environmental insurance coverage settlement fall apart because one of the participating carriers would not assume an extra 1% of the coverage, despite (or perhaps because … Continue Reading

Bad Faith and Settlement Negotiations

Here’s an interesting question recently confronted by the Ninth Circuit:  Is it bad faith for an insurance company to refuse to initiate settlement discussions in a third-party context when liability has become reasonably clear?  The carrier (Deerbrook, an Allstate company) took the position that bad faith could not exist unless the carrier failed to respond … Continue Reading

Potential pitfalls in settling with insurance companies

Here’s an interesting situation that recently came up.  A general contractor (Aristone) got sued in a construction defect case involving continuous water damage to a building over several policy periods, involving several insurance companies.  One of Aristone’s carriers – OneBeacon – stepped up to provide a defense.  Another – Pennsylvania Manufacturers – took a “no … Continue Reading

Triggering excess coverage through underlying settlements

Here’s a fairly common circumstance in large commercial liability claims.  A policyholder settles with the carrier in Layer 1 for less than its limits, leaving a gap between Layer 1 and the next layer up.  Does the carrier in Layer 2 then have an obligation to contribute to settlement with the underlying plaintiff?   Example:  I … Continue Reading

Coverage for class action settlements

Here’s a fairly frequent scenario in the insurance world.  The carrier takes a “no- pay” position on a liability claim.  The policyholder settles the case and then seeks reimbursement from the carrier in a coverage suit.  What exactly does the policyholder have to prove in order to get paid?   In Fireman’s Fund v. Security Ins. … Continue Reading

The insurance company’s duty to pay for settlement following denial of coverage

I’m currently preparing to try another coverage case.  This one involves the question of whether an insurance company, having denied a defense outright, can later second-guess the amount of defense costs and settlement paid by the policyholder out of its own pocket.  In preparing the case, I came across an interesting opinion written by the … Continue Reading

The insurance company’s duty to negotiate in good faith

Needless to say, it can be very dangerous for insurance companies to “roll the dice.”  Over at the Michigan Auto Lawyers Blog, Steve Gursten tells the story of an adjuster who showed up 40 minutes late for a mediation, and then wouldn’t go north of $1 million in a catastrophic truck accident case involving serious personal injury.  The carrier … Continue Reading

Insurance coverage for intellectual property lawsuits

Most lawyers brag about the cases they’ve won.  I prefer to pick apart the ones I’ve lost.  It’s cathartic. The subject of general liability insurance coverage for supposed intellectual property offenses is hotly contested.  Depending on the “personal injury” and “advertising injury” coverage forms used in a particular policy, for example, insurance may exist for … Continue Reading

Settling with insurance companies

Over at Settlement Perspectives, they have some good advice about working with your insurance carrier to resolve disputes.  These include: “Insurers hate surprises.  Communication is key.”  I will add the following.  You must observe the rules of the ritual.  Insurance companies are huge bureaucracies, and like all bureaucracies, they have their sometimes arcane procedures for getting things … Continue Reading