LexisNexis® Legal Newsroom
Prejudgment Interest: It’s Not Discretionary! Insurers Should Pay Up

By Jill Berkeley , Partner, Neal, Gerber & Eisenberg LLP Who has not heard in the first round of mediation, insurers say, “prejudgment interest and extracontractual damages are off the table.” That’s just wrong. In the last three months alone, policyholders have won prejudgment...

Recent Cases Discussing The Advice Of Counsel Defense: The Good, The Bad, And The Discovery

By David A. Mercer Introduction The gravamen of a third-party claim of bad faith is that the insurer failed to settle a claim against an insured when it had the opportunity to do so.1 The essence of the claim is that the insurer acted solely on the basis of its own interests, failed to properly...

Oh Oh . . . Did I Really Just Waive My Coverage?

Incidents are common place on construction sites. Unfortunately, sometimes things happen that damage the work or cause injury. Typically there is insurance coverage that covers these incidents, but a recent Federal Court decision highlights the pitfalls to the insured taking unilateral action to resolve...

Advertising Injury Coverage: Defense by Independent Counsel Dangerous

In June 2006, Theodore W. Lay, d/b/a Ted Lay Real Estate Agency (Lay), faxed an advertisement in regard to the sale of a particular property to Locklear Electric, Inc. (Locklear), and others. Because the facsimile message (fax) recipients had not given permission to receive these messages, Lay violated...

Insured May Settle Claim Before Suit if Insurer Wrongfully Denies Coverage

By Jill Berkeley , Partner, Neal, Gerber & Eisenberg LLP In Selective Ins. Co. v. Cherrytree Cos. , 2013 IL App (3) 120959 [ enhanced version available to lexis.com subscribers ], the Illinois Appellate Court for the Third District drove the final nail in the insurer’s “if there...

Another Item For Your Checklist: The Bad Faith Concerns Related To Overreaching Proposed Releases

By David A. Mercer A common scenario: claimant's counsel issues a time limit demand for policy limits and the insurer decides to accept the demand and tender the limits. Once the decision is made to accept the demand, the insurer should go through its checklist of concerns to make sure that each...

Halliburton Decision May Drive Up Litigation Costs and Impact Settlement

The U.S. Supreme Court’s recent decision in Halliburton Co. v. Erica P. John Fund, Inc. , [ enhanced version available to lexis.com subscribers ], is not the game changer for securities litigation that some hoped for, but D&O insurers will be keeping a close eye on securities cases to see whether...

California Fair Claims And SIU Regulations Require Annual Training

You Must Comply With California Regulations by September 1 Fair Claims Settlement Practices Regulations All insurers doing business in California must comply with the requirements of California Fair Claims Settlement Practices Regulations (the “Regulations”) or face the ire of, and...

Below-Limits Settlements Do Not Result In The Loss Of Excess Coverage - Zeig Remains Guiding Precedent, Even Post-Ali

By Adam G. Unikowsky, Attorney, Jenner & Block LLP Excess insurance policies typically include provisions stating that the policyholder cannot pursue coverage from the excess insurer until the policyholder has received payment from the underlying insurers. One of the most frequently-litigated...

Final Adjudication of Regulatory Enforcement Actions and Its Effect on D&O Insurance Coverage: Recent Developments

By Gregory J. May, Partner, Nelson Mullins Riley & Scarborough LLP In the wake of the 2008 crash, federal regulators, including the Securities and Exchange Commission ("SEC") and the Federal Deposit Insurance Corporation ("FDIC"), have markedly increased their investigation...

Supreme Court Awards The Kitchen Sink For Insurer’s Breach Of The Duty To Defend

If an insurer is determined to have breached the duty to defend, consequences will attach. It may be that the insurer must pay for the defense costs that it otherwise owed. Or the consequences may be much harsher – the insurer may lose the right to assert otherwise applicable defenses to indemnity...

Settlement Must Be In Writing and Meeting of Minds Required to Enforce Settlement

Litigants understand that the best resolution of a lawsuit is a settlement. Most are entered into with the assistance of mediators and multiple contacts with counsel. Sometimes one party thinks there is a settlement and the other does not agree. In just such a situation, Akers v. Minnesota Life Ins....

Court Declares Excess Policy Triggered Based On Insured’s Own Funding To Establish Exhaustion Of Primary

I rarely address primary--excess exhaustion cases in CO . They are often too policy language specific to offer any takeaways of substance. But I address Plantation Pipe Line Company v. Highlands Ins. Co., No. 12-29 (Tex. Ct. App. Aug. 29, 2014) here, [ enhanced version available to lexis.com subscribers...

More On The Duty To Defend -- And When It Might Never End

Whether an insurer’s duty to defend attaches arises in every liability claim. In the November 5, 2014 issue of Coverage Opinions I addressed the less-frequent issue -- when an insurer’s duty to defend un-attaches. The rule in the great majority of states is that the duty to defend ends...

The Right and Duty to Settle Third-Party Liability Claims: A 50-State Survey

By Scott G. Ball, Linda M. Dedman, and Pamela Dunlop Gates The Right and Duty to Settle Third-Party Liability Claims: A 50-State Survey This commentary offers a multi-state survey of an insurer’s duty to settle third-party claims. Insurers and the practitioners who represent them must understand...

Court Allows Insurer to Settle and Then Seek Recovery of Uncovered Damages

It is one of the toughest issues of them all for insurers. The insurer is defending its insured under a reservation of rights. There are strong coverage defenses. The underlying case is getting close to trial. There is a demand to settle within limits. It is a settlement that should be accepted based...

Court Holds That an Insurer was Entitled to Seek Equitable Contribution from Another Insurer for a Portion of Defense and Settlement Costs That it Paid in Connection With Three Underlying Lawsuits Brought Against Their Mutual Insured

Westport Ins. Corp. v. N. Cal. Relief , 2014 U.S. Dist. LEXIS 173676 (N.D. Cal. Dec. 16, 2014), [ enhanced version available to lexis.com subscribers ]. In Westport, the Northern District of California held that the allegations of the underlying complaints were sufficient to potentially trigger the...

Did This Supreme Court Just Change The Bad Faith Landscape? Is The Decision Poised To Have A National Impact?

It is unquestionably one of the most challenging issues to confront an insurer – the demand to settle a claim within the insured’s limits of liability. We all know the drill. An insurer has been defending its insured for a while. The case is coming down to the end and trial is on the horizon...

Policyholders Should Resist Insurer Demands to Allocate Settlements

By Dennis Cusack Policyholders seeking insurance funds to settle a case often face an insurer’s demand that some amount should be allocated to uncovered claims or parties. The issue arises often under directors and officers liability (D&O) policies, when settlements resolve the liability...

The Most Important Coverage Case Of 2015; Jeff Waltz Checks In With An Analysis From The Bayou

In the last issue of Coverage Opinions I discussed the Louisiana Supreme Court’s recent decision in Kelly v. State Farm Fire & Casualty Co., No. 2014-CQ-1921 (May 5, 2015), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ]. In general, the Louisiana...

Supreme Court Addresses Really, Really Late Notice: Like, After Settlement

Tapas: Small Dishes of Insurance Coverage News & Notes An insured settled a case and then gave notice to its insurer. As you may expect, the Supreme Court of Nebraska in Rent-A-Roofer, Inc. v. Farm Bureau Property & Casualty Ins. Co., No. S-14-895 (Neb. Sept. 11, 2015), [subscribers can access...

Examining Insurer Demands to Allocate Settlements

Policyholders seeking insurance funds to settle a case often face an insurer’s demand that some amount should be allocated to uncovered claims or parties. The issue arises often under directors and officers liability (D&O) policies, when settlements resolve the liability of covered directors...

Appeals Court: Primary Insurer Must Initiate Settlement Negotiations; Excess Insurer? -- No

It is unquestionably one of the most challenging issues to confront an insurer – the demand to settle a claim within the insured’s limits of liability. We all know the drill. An insurer has been defending its insured for a while. The case is coming down to the end and trial is on the horizon...

Insurer Between a Rock and a Hard Case: Limits Demand That Does Not Release All Insureds

It is the proverbial “damned if you do and damned if you don’t” situation for insurers. An insurer is presented with a policy limits demand to settle for one insured – and it should be accepted based on liability and damages considerations -- but the settlement offered will not...

Insurer Satisfied Duty to Defend By Obtaining Dismissal of Counterclaim Without Prejudice

In Haskins , the court granted the insurer’s (“Wausau”) motion for summary judgment, finding that it did not breach its duty to defend the insured (“Haskins”) in connection with an underlying environmental cleanup action. Haskins owned commercial property in San Francisco...