Bad Faith Lawsuits From Time-Limited Demands: Pre-Suit Procedures, Reasonable Standards, Special Situations

An insurer's rejection or non-payment of a properly crafted time-limited demand for settlement or policy limits can be met with a lawsuit alleging bad faith. What constitutes a valid demand that triggers the obligation to respond and what constitutes a proper response has generated a broad body of case law as well as a wave of statutes that attempt to define what is required by both policyholder and insurer. 

Counsel for both sides must be familiar with not just the elements of various bad faith causes of action and defenses, but also pre-suit requirements and procedures recently enacted in some states, like California and Florida. Whether bad faith exists still depends on whether the demand was "reasonable" and the response "unreasonable." These reasonableness standards make summary judgment challenging but not impossible. Certain often-encountered scenarios require insurers to exercise great care to avoid possible missteps: multiple claimants with a single limit, where liability is debatable, where coverage is questionable, or undocumented costs and expenses. 

Listen as this experienced panel of insurance attorneys guides counsel through how bad faith litigation arises in the context of time-limited demands, outlines practical tips for avoiding suit, and then offers guidance for navigating claims, defenses, pre-suit requirements, summary judgment, and preparing for litigation if a bad faith case is filed.