Our firm handles all manner of insurance defense and litigation cases, including “bad faith” claims. Courts and legislatures have held, in almost every state, that regardless of what the policy says there is an inherent obligation every insurance policy to act in good faith. Insureds must cooperate with their insurers in the defense of claims, and insurers must consider the insured’s interest in deciding whether to compromise, pay, and/or litigate a claim. In particular, Georgia and Alabama courts regard the relationship between insurance companies and their policyholders as something akin to a fiduciary relationship requiring each party engage in trust and good faith in upholding the obligations required of them under the policy. In general, bad faith on the part of insurance companies constitutes delaying, withholding, or denying the policyholder benefits that are based on legitimate claims filed under valid insurance policies.
This most often comes up when a liability insurer refuses to settle a claim for which there is clear liability within the policy limits, thus exposing the policyholder and/or other insureds to an excess verdict. However, if a healthcare insurer refuses to pay for a covered treatment or benefit, then this too could be regarded as “bad faith.” It is also considered “bad faith” when a liability insurer refuses to defend its insured concerning a covered matter. The denial of any covered benefit could create a “bad faith scenario” for an insurer, just as refusing to cooperate with the investigation of a claim and/or the defense offered by an insurer could be bad faith on the part of the insured.
Our attorneys can effectively advise on how to prevent bad faith claims and exposures. If it is unclear whether a matter is covered, then we are available to offer guidance often in the form of a legal “opinion” letter as to whether the matter in question is covered by the policy. Sometimes the best course of action is a petition for declaratory relief (i.e., asking a Court to decide whether the matter in question is or is not covered). Sometimes it is best to file an interpleader, which involves paying money into the registry of a court and letting it decide which of several stakeholders are entitled to the funds. However, when it is too late for prevention, we are also able to assist in defending bad faith litigation and mitigating the exposure.
Whatever the situation, we are here when you need us. Whether you have a potential bad faith claim or exposure, or whether the matter is already in litigation, contact us today.