Set-Up of Insurer Bad Faith, Defense of Bad Faith Suits and "Reverse Bad Faith" Claims: Insurer vs. Policyholder Perspectives

Why Should You Attend:

This webinar will highlight the multi-billion dollar business of insurance and how the tort of bad faith has grown to be a force that bleeds the insurance industry of potential profits. It will explain what the tort of insurance bad faith is, various methods by which insurers are set up by lawyers to obtain actions they can later claim are tortious, and the various weapons provided by legal precedent and professional claims handling to work to reduce the amount claimed by plaintiffs’ bad faith lawyers.

Areas Covered in the Webinar:

• The tort of bad faith and why it was created.
• How the tort of bad faith grew from payment of an excess verdict to multi-million punitive damage judgments.
• The methods used to set up an insurer for claims of bad faith.
• The appropriate responses to an attempt to set up the insurer for a claim of the tort of bad faith.
• The type of evidence available to prove the insurer was set up.
• How to convince courts that attorneys who handle policy claims against insurance companies are no longer interested in collecting on those claims, but spend their wits and energies trying to maneuver the insurers into committing acts which the insureds can later trot out as evidence of bad faith.
• The defenses available to insurers who are charged with the tort of bad faith.

Who Will Benefit:

• Insurer Claims Executives
• Insurer Claims Representatives
• Independent Insurance Adjusters
• Insurance Agents and Brokers
• Operational Risk Managers
• Insurance Coverage Lawyers
• Insurance Claims Lawyers

Instructor Profile:

Barry Zalma, Esq., CFE, has practiced law in California for more than 43 years as an insurance coverage and claims handling lawyer. Mr. Zalma now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally, for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

Zalma recently published ebooks - Insurance Claims: A Comprehensive Guide, published by the National Underwriter Company, October 2014; Mold Claims Coverage Guide, published by the National Underwriter Company, October 2014; Construction Defects Coverage Guide, published by the National Underwriter Company, October 2014; The Insurance Fraud Deskbook, Published by the American Bar Association, Tort and Insurance Practice Section, July 2014; MOM and the Taipei Fraud – Published as an e-book March 2014 by ClaimSchool, Inc.; Zalma on California SIU Regulations” published November 2013, by ClaimSchool, Inc.

Topic Background:

The covenant of good faith and fair dealing has been applied equally to both the insurer and the insured since, at least, 1766 when Lord Mansfield in the British House of Lords ruled in a case called Carter v. Boehm. However, since the invention of the tort of bad faith in the 1960’s breach of the covenant by an insurer became a tort but breach of the covenant by the insured is not a tort but may be raised as a defense to claims that the insurer tortuously breached the covenant.

As a result of the lack of equal treatment lawyers who represent plaintiffs in suits against insurers for the tort of bad faith are tempted to use techniques to set up insurers to do things that can later be trotted out as evidence of bad faith rather than attempt to promptly and fairly settle a claim. Insurers may use the bad faith conduct of the insured and the insured’s counsel as a defense to the tort of bad faith suits.

Insurers must refuse to fall into the set up traps laid by plaintiffs’ counsel and must aggressively defend claims of bad faith when they believe they were set up and bring to the fore evidence that the insured treated its insurer in bad faith as a defense to the bad faith suit.

Insurance bad faith was created as a tort to protect the public against abuses by the insurance industry that was perceived to take advantage of unwitting members of the public. In practice, over the last 50 years, the tort of bad faith often is used to bludgeon an insurer into paying claims it does not owe because the expense of defending such actions exceed the amount it would cost to defend. Many insurers pay extortion to avoid the expense of defending cases claiming the tort of bad faith and the extreme cost if the insurer loses at trial.

Courts also must be educated to recognize a set up from a real act of bad faith. The tort of bad faith has run its course and should either be totally done away with or made mutual so that an insurer can recover tort damages from an insured whose conduct breaches the promise to treat the insurer with good faith and fair dealing.

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