Navigating Bad Faith Claims by Non-Insureds: Insurer and Policyholder Strategies
Jurisdictional Differences, Common Law vs. Statutory Claims, Insurer and Policyholder Obligations, Methods of Proof
Course Details
- smart_display Format
Live Online with Live Q&A
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Insurance
- event Date
Tuesday, November 18, 2025
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE course will discuss the rights and obligations of insurers, policyholders, and non-insureds in circumstances where a non-insured asserts an insurance bad faith claim against an insurer. The parties' rights and obligations vary markedly from jurisdiction to jurisdiction. Our panel will address the viability of bad faith claims by non-insureds, strategies for defending against and recovering on such claims, and the current and varied status of statutory and case law in representative jurisdictions.
Mr. Jacobus' practice over the past decade has largely centered on high risk, high value insurance coverage litigation, but he comes from a broad civil and commercial litigation and trial background. He has tried jury trials to verdict in CA, IL and LA. Several of his cases have resulted in written opinions in trial courts and courts of appeal, and he has argued appeals in both state and federal courts.
Mr. Levin focuses his practice on tort and commercial litigation, especially insurance bad faith and insurance coverage disputes, representing corporate and individual policyholders alike. He argued the leading Colorado case concerning pre-judgment assignment agreements to the state supreme court. Mr. Levin lectures frequently on insurance law topics.
Mr. Mascia’s practice concentrates in commercial litigation and insurance coverage litigation exclusively on behalf of policyholders. He has extensive experience in insurance coverage matters in state and federal court involving general liability, professional liability, and property insurance. Mr. Mascia is a frequent author and lecturer on a variety of insurance law topics.
A bad faith claim may arise when an insurer fails to settle a claimant's liability claim brought against its insured for an amount within the policy limits and a verdict over the limits is then obtained, exposing the insured to liability for the excess amount. While it is generally accepted in many jurisdictions that, under certain circumstances, the insured has a right to recover from the insurer the total amount of the judgment, even if it exceeds the policy limits, the rights of non-insureds (typically the plaintiffs who brought the lawsuit against the insured in the first place) are less certain under these circumstances. Notably, some states allow the non-insured claimant to bring lawsuits for the insurer's bad faith failure to settle the claim within the policy's limits. Where allowed, such claims may be based in the common law or in state statutes governing the situation.
Listen as our panel of insurance law specialists examines non-insured bad faith claims from the perspective of both the policyholder and the insurer, particularly in light of recent cases and the continuing impact of the 2018 ALI Restatement on Liability Insurance. The panel will discuss best practices and strategies for each side in litigation where a non-insured has brought a bad faith claim against an insurer.
I. Overview
II. State laws and recent developments
III. ALI 2018 Restatement of Liability Insurance
IV. Policyholder perspectives
V. Insured perspectives
VI. Best practices and practical strategies
The panel will review these and other key issues:
- Which states allow statutory non-insured or third-party bad faith claims?
- Which jurisdictions allow common law non-insured or third-party bad faith suits?
- What are the elements that support a claim of a non-insured or third-party bad faith?
- What are the insurers' and the policyholders' obligations?
- What are effective methods for a non-insured to prove an action for non-insured or third-party bad faith, and what are the insurers' best defenses to such claims?
- What are the most recent cases affecting these types of claims?
- What impact has the ALI's 2018 Restatement of Liability Insurance had on third-party bad faith litigation?
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