About the Course
Introduction
This CLE webinar will examine how counsel for insurers can recognize when a third-party plaintiff attempts to "set up" the insurer for a bad faith claim. The panel will address what insurers can do to avoid this trap, counterclaims, and relevant affirmative defenses based on the plaintiff's fraudulent conduct or misrepresentations.
Description
An insurer that has acted in bad faith may be liable for significant extra-contractual and punitive damages. Thus, unscrupulous plaintiffs have manufactured, manipulated, and proffered settlements under conditions which the insurer must, for legitimate reasons, refuse and thereby make itself vulnerable to damages for "bad faith."
When defending bad faith claims, insurers are increasingly deploying strategies, counterclaims, and affirmative defenses to expose the plaintiff's wrongful conduct related to the claim, such as the plaintiff's failure to cooperate and give proper notice of a claim or fraud and misrepresentation.
Some courts permit insurers to assert a "bad faith setup" defense, whereby they are allowed to demonstrate that claimants employed their own bad faith setup tactics solely to obtain punitive damages. There is also a question as to whether an insurer can assert a counterclaim for "reverse bad faith," whereby an insurer can recover for a plaintiff's breach of the covenant of good faith and fair dealing, although this approach has had limited success. Only one state expressly authorizes this defense by statute. Nonetheless, several reported cases recognize the claim, at least in dicta, and insurers continue to deploy it.
Listen as our authoritative panel of policyholder and insurer counsel discusses the latest litigation trends in defenses raised by insurers in bad faith litigation that focus on the alleged wrongful conduct of the claimant. The panel will cover the claimant's bad faith setup, fraud or misrepresentation, and the affirmative defense of reverse bad faith.
Presented By
For the last 16 years, Chambers Guide to USA Coverage Lawyers has consistently recognized Mr. Koepff, nationwide and for New York, a highly seasoned litigator, appellate attorney with a standout practice in insurance of sensitive and complex claims, including arising out of primary and excess liability, products liability, professional liability, and environmental liability. Just recently, Chambers recognized Mr. Koepff as an outstanding coverage litigator in New Jersey. He has also been recognized by Legal 500 USA as one of the nation's leading insurance lawyers. Mr. Koepff has been successful in over 25 coverage (jury and bench) trials and 35 coverage (US, Bermuda and London) arbitrations. His successes include major favorable decisions from the New Jersey Supreme Court, the New Jersey Appellate Division, New York Appellate Courts, the Court of Appeals for the Second Circuit and the Southern District of New York. Similarly, his successes have included favorable arbitration awards.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, June 11, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Trends in defenses to bad faith claims, focusing on claimant's conduct
A. Bad faith setup
B. Fraud or misrepresentation
C. Other defenses or strategies
II. Trends in "reverse bad faith" as an affirmative defense
III. Best practices for policyholders and claimants to counter these defenses
IV. Best practices for insurers in raising and proving these defenses
The panel will review these and other relevant issues:
- Have tort reform statutes tempered the ability of claimants to orchestrate bad faith claims?
- What conduct by claimants generally gives rise to a bad faith setup defense, and how have courts treated this defense?
- What types of conduct by the policyholder or claimant are typically considered bad faith conduct?
- In what circumstances have insurers pursued the doctrine of reverse bad faith, and how have the courts treated these arguments?
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