1. By failing to provide the policyholder with a proper and effective reservation of rights letter. 2. By failing to handle the claim in good faith, even if coverage is later denied. I agree with you. Both situations are compelling, my dear Readers. Nonetheless to protect your vulnerability we shall review only Rule #1 for today. It is considered prudent in polite society to refrain from biting off more insurance meat than one can chew in a [...]
What is the burden of proof? In most jurisdictions that allow such a claim, the case resounds in tort. Thus, the standard burden of proof applies: duty, breach of duty, causation and damages. Today we will focus on the third element - causation. How is this proven? Courts differ in specifics, but all agree that an excess carrier must show that the claimed damages are proximately caused by the primary's bad [...]
THE BOTTOM LINE: An excess carrier has five viable claims against the primary carrier. Both a primary and excess insurer contract with a policyholder for coverage, but they do not contract with each other. Despite this lack of privity, when a verdict is rendered that exceeds the primary coverage, what claims can an excess insurer make against the primary insurer in order to avoid coverage? 1. Breach of implied duty of [...]
