Bad Faith Exposures

Degan, Blanchard & Nash's litigation counsel represent insurance companies faced with lawsuits brought by individuals and business in a number of jurisdictions in both the first-party and third-party contexts. First-party claims concern the handling of a claim made directly against an insurer by its insured. Such claims, for example, include claims made directly against one’s homeowner’s insurer for property damage, uninsured/underinsured motorist carrier, and medical payments carrier. On the other hand, third-party claims arise out of an insurer’s handling of a claim made by a third-party against the insured and typically arises in cases involving third-party claims of property damage and bodily injury.

Notably, in most jurisdictions, once a claim is no longer in dispute or a settlement has been reached, an insurer has a limited time to tender payment. However, disputes frequently arise about whether a claim is reasonably in dispute. Typically, where there is a substantial, reasonable, and legitimate dispute as to the extent or amount of an alleged loss, an insurer may avoid the imposition of penalties. Where such an issue exists, capricious or without probable cause, it should not result in penalties being levied against the insurer. However, an insurer must pay any undisputed amount over which reasonable minds could not differ. Because bad faith claims arise after the issuance of a policy, they cannot be accounted for when an insurer is setting premiums based on the risk being insured. As a result, bad faith claims can be costly to an insurer.

The attorneys of Degan, Blanchard & Nash are sensitive to the perceived imbalance of power between insurers and insureds, and they approach bad faith cases from a broad perspective involving coverage analysis, regulatory compliance, and litigation. Our attorneys collectively have decades of experience in researching and drafting bad faith and insurance coverage opinions, litigating extra-contractual disputes, and representing insurers in regulatory compliance matters. Our attorneys also have experience in drafting and amending policy language for insurers to avoid further bad faith exposures.

Our attorneys successfully resolve bad faith issues and represent insurance companies in a dedicated and creative manner, while providing the personalized and flexible service of a small firm. Whatever the dispute entails, our bad faith lawyers work diligently to achieve the best possible solution for our clients.