Bad Faith Claims
Claims that an insurer has acted in bad faith can be incredibly damaging to a company's reputation and bottom line. Litchfield Cavo LLP helps protect carriers' interests by mounting an aggressive, thorough defense.
Insurance bad faith claims can stem from myriad alleged wrongdoings, including improper handling of an investigation, claim administration, settlement or claim denial. They typically come about through insurance coverage disputes. As our attorneys are involved in resolving coverage litigation, we counsel clients throughout the process of creating bad faith risk management strategies.
Bad faith claims require careful handling and litigation from the outset. Our attorneys have managed many of these cases over the years and have considerable experience addressing the nuances of bad faith litigation. Additionally, because of our broad presence in nationwide insurance litigation, we possess a thorough understanding of the varying state insurance laws that come into play.
Avoiding the risk
Bad faith claims expose an insurer to risk on many levels, including the following:
- Extra-contractual damages. A thorough defense can prevent or limit a court's assessment of bad faith damages, including interest.
- Punitive damages. In some states, insurers face punitive damages — even treble damages — on a plaintiff's bad faith award.
- Exposure of confidential files. The discovery process may force an insurer to reveal confidential files and protected attorney-client communications for the case at hand and, in some instances, for any similar cases. These documents quickly become public and are usually resurrected in litigation for years to come.
Our team's insistence upon open communication with clients and our commitment to aggressive litigation tactics are aimed at protecting insurers from the many negative consequences that arise from bad faith claims.
Our bad faith claims litigation record
Litchfield Cavo has significant experience counseling clients on bad faith matters and in successfully litigating such claims. Examples of our recent results and current representations include:
- Obtained summary judgment in a declaratory judgment action on behalf of an insurer. The court agreed that the insurer had properly paid all that was owed under the policy and dismissed the policyholder's declaratory judgment and breach of contract causes of action. Policyholder counsel then stipulated to the dismissal of the bad faith cause to action, as the claim was no longer proper.
- Successfully defended a bad faith claim arising from the settlement of multiple bodily injury claims where the policy limits were insufficient to cover all such claims.
- Successfully represented bad faith claims relating to the set-off provisions of an underinsured motorists benefits policy.
- Obtained a jury verdict in favor of our client in a claim involving the alleged bad faith denial of coverage and alleged non-compliance with policy reporting requirements under a stop-loss warranty policy.
- Obtained a jury verdict in favor of our client in a statutory bad faith action arising from the carrier's alleged failure to settle a case after liability was reasonably clear.
- Obtained a jury verdict in favor of our client in a multi-defendant case involving alleged bad faith settlement practices.
- Successfully defended allegations of bad faith claims handling as part of a multisite environmental coverage matter involving thousands of underlying claims.
- Successfully defended a common law and statutory bad faith claim involving the alleged improper investigation and denial of a multimillion-dollar claim.