Insurance Bad Faith - Avoiding Extra-Contractual Exposure: When Does The Duty To Negotiate Arise?

March 20, 2015

Neil Selman will be a panelist at the upcoming CLM Annual Conference in Palm Desert. The topic is "INSURANCE BAD FAITH - Avoiding Extra-Contractual Exposure: When Does the Duty to Negotiate Arise?" Participants on the panel include Christopher Carucci, Vice President, Everest National Insurance Company, Sonia Odarczenko, Claims Counsel, Markel Service, Inc., and Harrison Yoss, Partner, Thompson, Coe, Cousins & Irons LLP.

Failure to settle a case within policy limits can have catastrophic effects for the insured and the insurer, and recent cases have significantly changed the landscape concerning the duty to settle. The old rule that an insurer only had a duty to respond to a settlement demand within limits is being overhauled by courts that have concluded that "a claimant's interest in settlement" is enough to trigger a duty while others now seem to require the carrier initiate settlement discussions when necessary to protect the insured, even without a demand. The session will discuss these changes and discuss the best strategies for avoiding situations where a failure to properly respond to settlement opportunities can lead to extra-contractual exposure. Topics will include how to identify when a duty to discuss settlement arises; how best to communicate with the insured and the claimants; the role of the claims person and the role of defense counsel; and how claims professionals should respond to such situations, both internally and with other stakeholders.