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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Insurance

Date & Time
  • event Date

    Tuesday, November 9, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will discuss how an insurer's duty to settle may be impacted by two difficult but recurring situations: (1) when multiple claimants are competing for insufficient policy limits against an insured, and (2) when claimants from a single occurrence will release fewer than all of multiple insureds sharing the same limit of liability. The panel will review strategies for resolving the claims while avoiding bad faith litigation.

Faculty

Jerold Oshinsky
Partner
Kasowitz Benson Torres LLP

Mr. Oshinsky has more than 30 years of experience litigating insurance recovery cases in federal and state courts throughout the U.S. on behalf of Fortune 500 companies and others in the chemical, pharmaceutical, financial, food, education and health industries. He litigates some of the most significant, complex insurance coverage issues in the country, applying theories which he developed that have guided insurance recovery law since its inception. Mr. Oshinsky also advises clients about how to maximize their insurance assets, and he is frequently selected as a party-appointed arbitrator in complex insurance coverage disputes.

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David W. Overstreet
Partner
Earhart Overstreet, LLC

Mr. Overstreet focuses his practice on commercial litigation and professional liability. He spends a significant amount of time representing businesses and professionals in civil suits, including attorneys. Mr. Overstreet also speaks to groups including insurers, law schools, and organized professional associations about claim avoidance and mitigation.

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Jonathan M. Stern
Miscellaneous

Mr. Stern is counsel in the Litigation Department and a member of the Aviation, Insurance Services, and Appellate Groups. His practice focuses on aerospace-related litigation, including civil rights cases against airlines, insurance coverage and claims handling matters involving aerospace insurance, and personal injury and wrongful death litigation involving aviation products or aviation operations.

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Description

Liability insurers, depending on the jurisdiction, may have to accept a policy limit settlement demand when liability is reasonably clear and the amount of the judgment "likely" will exceed the policy limit. Unique problems arise when an insured faces multiple claims from a single occurrence, liability is clear, and the policy limits are insufficient to settle all claims. Options for dealing with the issue exist, but all potentially expose the insurer to bad faith claims. The panel will explore different approaches, the jurisdictions that follow them, and solutions that offer insurers the best protection from extracontractual claims.

Equally vexing is the situation in which more than one insured, such as both the owner of a vehicle and its driver, are covered under one policy. A claimant might demand the policy limits but release only one of the insureds. In such a situation, the insurer could face bad faith claims from one insured for refusing to settle and from the other for agreeing to settle.

An interpleader action may not be the answer. Interpleading policy limits can leave the insurer vulnerable to accusations of artificial exhaustion, abandonment of the duty to defend, and a bad faith claim that the insurer shirked its duty to use policy funds to limit the remaining liability of the insured.

Listen as our panel discusses these issues and review the best strategies for resolving the claims while avoiding bad faith litigation.

Outline

  1. Multiple claimants and insufficient policy limits
    1. First come, first served
    2. Settle as many as possible
    3. Settle based on the severity of the injury
    4. Prorate proceeds based on some formula
  2. Multiple insureds and insufficient funds to release all
    1. "Majority" view
    2. "Minority" view
  3. Interpleader
  4. Impact on the excess carrier

Benefits

The panel will review critical issues, such as:

  • Should the insurer settle with multiple claimants on a "first come, first serve" basis, settle the most severe claims first, or attempt to "pro-rate" settlements with all claimants?
  • What can be done if fewer than all potential claimants assert claims or file suit?
  • Does exhaustion of the policy limits through settlements terminate the duty to defend the insured?
  • Should the interpleader of the policy proceeds be considered?