Businesses buy liability insurance to protect themselves from lawsuits brought by people injured by the business’s employees. But after the injury, and after the plaintiff has sued, the main concern is often between the injured plaintiff and the insurer for the business that doesn’t want to pay.

In this context, the defendant often settles the lawsuit and then gets out of the way to let the plaintiff get what it can from the insurer, which is often the only party with enough money to pay a judgment. But structuring this resolution must be undertaken with great care in recognizing legal niceties that, missing a crossed “t” or dotted “i” in the process, can give the insurer a free get-out-of-jail card, as a recent case arising out of a tragic accident in Boston shows. Continue Reading Pitfalls abound in settling around an insurer acting in bad faith

Last year, I wrote about a decision by Florida’s Fourth District Court of Appeal (link here) holding that an insured, post-loss, could assign its claim against its homeowner’s insurance policy. Recently, the same issue was before the Second District. Continue Reading Florida Court of Appeals again holds that insureds may assign rights under a policy after a loss occurs.

Yesterday the Supreme Court of Oregon overruled Stubblefield v. St. Paul Fire & Marine (1973) and paved the way for a more commonsense approach to negotiating stipulated judgments. Stipulated judgments have been a well-worn, though somewhat perilous, mechanism for insureds to resolve liability claims against them when their insurers defend in bad faith. In doing so, however, the parties to the stipulated judgment were tasked with navigating needlessly technical steps along the way. In Brownstone Homes Condo. Ass’n. v. Capital Specialty Ins. Co., the court removed one of the insurer’s “gotcha” defenses to an otherwise valid stipulated judgment. Continue Reading Oregon Supreme Court eases the path to hold insurers accountable for bad-faith practices

As I wrote in an earlier blog post (see my August 10, 2015 article here), insurers have a duty to defend their policyholders against any potentially covered loss, which means that insurers are required to defend and attempt to settle claims on behalf of their policyholders even when coverage for the underlying claim is uncertain or doubtful. But as a recent case from the Washington Court of Appeals illustrates, insurers may not be off the hook even if the duty to defend does not apply. Washington, like a number of other states, has enacted consumer-protection statutes that can provide powerful remedies to policyholders whose insurers failed to properly investigate claims before denial.

On August 24 2015, Division 1 of the Washington Court of Appeals issued a decision that is certain to make insurers tremble. In Xia v. ProBuilders Specialty Insurance, the court upheld a summary-judgment order holding that the insurer did not breach its duty to defend, but nonetheless left open the possibility that the insured could recover damages under Washington’s Insurance Fair Conduct Act (“IFCA”) and/or the state’s Consumer Protection Act (“CPA”). Continue Reading Insurer’s claim denial may violate state consumer-protection statutes even when the insurer has no duty to defend

It is common practice in Florida for companies offering emergency-restoration services to
take an assignment of the insured’s property-damage claim against the insured’s property policy in lieu of the insured paying the restoration company directly and then seeking reimbursement from an insurer.

For instance, imagine that a pipe bursts in your home, flooding a bedroom. The restoration company will come out, remove the water and damaged property, take an assignment of your claim against your insurer (and, depending on your deductible, you paying the deductible), and then seek payment directly from the insurer. Usually this goes off without a hitch. But recently Security First Insurance Company (“Security”) wanted to test this method, and it failed. Continue Reading Florida Court of Appeals: Yes, you can assign your claim after a loss