Avoiding Landmines In 3rd Party Clms

Insurance companies have recently experienced a dramatic increase in bad faith claims based upon their failure to settle third-party liability claims within policy limits. Much of this can be attributed to relaxed standards for bad faith throughout the country and trial judges’ extreme reluctance to dispose of even the most frivolous failure-to-settle claims. Recently, a Florida trial judge upheld a $3 million jury award based upon an insurer’s failure to accept a demand within policy limits that expired only 15 days after the underlying accident. Every claim professional likely will confront an excess verdict where he or she had the opportunity to settle the claim within policy limits.