Extra-Contractual/Bad Faith Litigation

Extracontractual claims are typically complicated and hard fought, and pose a unique set of risks to insurers, opening potentially vast exposures. In today’s modern legal landscape, how an insurance carrier handled a claim has become as important as the threshold issue of whether there was coverage under the policy in the first place. Attacks on an insurer’s claims handling, coverage determinations, SIU investigations, underwriting and overall treatment of its insured routinely go hand-in-hand with breach of contract allegations. Having practiced in this field for over twenty years, McClellan Bernstiel brings its bad faith and extracontractual experience to defend such bad faith allegations aggressively. The firm understands that, unlike other coverage disputes, bad faith disputes involve attacks on our clients’ name, good standing, and essential fairness in treating their policyholders. Where appropriate, we explore, and have been successful in achieving, quick resolutions of bad faith claims through early, proactive settlement negotiations and/or alternative dispute resolutions mechanisms.

If resolution is not possible, we effectively and efficiently manage bad litigation from the outset including successfully having these claims dismissed through pre-trial motion practice. When litigating bad faith cases, we understand the attendant stresses on our carrier clients and how carefully they must be managed and monitored given the potential exposure. We are keenly aware of the unique stress placed on testifying employees and corporate designees and are adept at preparing these witnesses to testify effectively.

McClellan Bernstiel attorneys defend insurance clients in litigation alleging first and third party extracontractual claims relating to all lines of business including property, general liability, professional liability and D&O, life/health/disability and automobile policies. We handle litigation arising from allegations of bad faith claims handling, underwriting, excess verdicts, uninsured or underinsured motorist coverage, consent judgments, default judgments and garnishment actions. Our attorneys have successfully defeated individual and class claims seeking actual and consequential damages, statutory penalties, punitive damages, attorneys’ fees and policy benefits. McClellan Bernstiel attorneys have successfully defended major insurers in state, federal and appellate courts throughout the United States and have never allowed a bad faith or extra contractual verdict to be taken against one of our clients.

We recognize that to defend a bad faith case successfully, we must be experts in understanding your business. For this reason, we routinely visit our clients and offer everything from day-long seminars to “lunch and learns” where interaction between our attorneys and our clients occurs and learning goes both ways. We are sensitive to how insureds’ counsel attempt to convert the fact finding process during the claims investigation into a platform for bad faith litigation, and we routinely counsel and train our insurance industry clients on best practices and good faith claims handling in order to avoid bad faith exposure.