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Bad Faith Blog

We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.

Bad Faith Blog
February 5, 2017

No Excess Judgment, No Problem: Excess Insurer Has Claim Against Primary Insurer

Summary: An employer’s excess insurer brought an action for bad faith against the primary insurer, which had defended the employer against a worker’s personal injury action that resulted in a settlement in excess of the primary insurer’s limits. The excess insurer alleged the primary insurer should have settled the case within the primary carrier’s policy’s limits. The trial court dismissed the claim finding it was not actionable when there was no excess judgment entered against the insured. The Court of Appeals reversed and remanded.

Bad Faith Blog
August 28, 2016

Excess Insurer’s Mistake About its Applicable Limits, Absent Bad Faith, Limited its Exposure to Contract Damages

Summary: A tanker truck spilled 6,380 gallons of gasoline, which flowed underneath the highway and beneath the property of multiple homeowners. This case involved the available amount of coverage under primary and excess policies that included both commercial general liability and auto liability coverages. The primary carrier quickly exhausted its $1,000,000 Auto limit through clean-up costs, and when suit was filed the primary carrier tendered the defense to the excess carrier. Excess carrier defended until its $4,000,000 “Per-Occurrence” limit was exhausted and then, believing its applicable limits had been exhausted, re-tendered defense back to the primary carrier. A declaratory judgment action ensued over the amount of available primary and excess coverage. The insureds entered into a “covenant not to execute” agreement that resulted in a stipulated judgment in excess of $13,000,000.