Bad Faith Blog

Veterinarians sued insurers for an allegedly improper defense under a professional liability insurance policy. The insurers filed a counterclaim seeking reimbursement. After the matter was sent to arbitration, the arbitration award did not include a finding that the insured’s Cumis counsel charged fees which were “reasonable and necessary.” In view of the failure to find that the insurer had improperly withheld the full amount of the fees and the further finding that the sanctions imposed for breach of a protective order, precluded a finding of coverage under California law and gave rise to a claim for reimbursement by the professional liability insurer.