The last of the “Big 3” Bad Faith claims is Bad Faith policy rescission.
Imagine a scenario where the insurance carrier has started to defend you, and the case is set for trial. Your carrier-selected Panel Counsel has received a Settlement Demand from the injured party, and the carrier then—10 days before trial—rescinds the policy! You get your $1,600 premium back, and Panel Counsel sends you a demand for a BIG trial retainer—since the carrier is no longer paying it.
Imagine your joy.
Bad Faith?
You betcha.
Fanciful Imaginary Scenario?
Not on your life.
Bad Faith policy rescission is all too common. We just settled a case for a broker against Lloyds of London for $625,000 when that very thing happened. (And while we’d like to settle all claims for that much, or more, each claim will be different.)
What’s almost worse … is when a carrier doesn’t rescind the policy, but says the claim isn’t covered at all. That decision leaves you naked.
“Defense counsel” does just that, defends the claim.
“Coverage counsel” files suit to make a carrier pay for the defense of the claim, to make the carrier honor the insurance coverage you paid for.
Bad Faith and Coverage Counsel can be, and frequently are, the same lawyer. In fact, Cumis Counsel (an independent attorney you can pick to defend claims against you – that the carrier pays!) can also be both coverage and Bad Faith counsel too, because, after all, they are your attorneys.
If you suspect your insurance carrier has engaged in Bad Faith policy rescission, call us or send an email using the form to the right.
