• videocam Live Webinar with Live Q&A
  • calendar_month June 11, 2026 @ 1:00 PM ET/10:00 AM PT
  • signal_cellular_alt Intermediate
  • card_travel Insurance
  • schedule 90 minutes

Insurer Bad Faith Setup Defense and Reverse Bad Faith Claims: Insurer vs. Policyholder Perspectives

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

Paul Koepff
Partner
Clyde & Co LLP

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. Mr. Koepff's successes have included favorable arbitration awards. 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 him as an outstanding coverage litigator in New Jersey.

C. Scott Rybny
Partner and Chair of Insurance Regulatory, Compliance & Governance Practice
Thomas, Thomas & Hafer, LLP

Mr. Rybny is a Partner and Chair of TTH’s Insurance Regulatory, Compliance & Governance Practice. He brings over 25 years of experience in counseling insurance carriers, agents and third-party administrators in various capacities. While Mr. Rybny continues to represent insurers in litigations involving coverage questions arising under property & casualty, fiduciary liability, professional liability and commercial crimes policies, ten years ago he recognized that a vacuum existed on the regulatory side among certain aspects of the insurance industry as many attorneys spent much of their careers in the departments of insurance than in the courtroom defending the language of the insurance policies. He emerged himself in various insurance regulatory matters, bringing with him his not only his knowledge of the business of insurance from representing insurers in extra-contractual and coverage litigations, which experience gives him the unique ability to advise and counsel insurers on corporate and policy-related issues even before litigation arises. Mr. Rybny now counsels insurers on creating innovative insurance products, general regulatory compliance. His approach to regulatory matters is cost-effective, practical and risk-based. Mr. Rybny has taken part in special investigations involving international banks and foreign companies, as well as property claims as a result of Superstorm Sandy and Covid-19. He is a prolific author and speaker on emerging issues in the insurance industry, providing both in-house training and presentations at various organizations around the country.

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


  • Live Online


    On Demand

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?