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Bad Faith Blog

We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.

Bad Faith Blog
May 15, 2019

Colorado Excess Insurance Carrier’s Equitable Subrogation Claim Against Primary Carrier for Refusal to Settle Required Allegations and Proof of Bad Faith

The Colorado Court of Appeals held that an excess carrier asserting an equitable subrogation claim against a primary insurer for a failure to settle a claim within the primary carrier’s liability limits steps into the shoes of the insured, and must plead and prove bad faith to recover against a primary carrier for failing to settle. In the underlying case, a medical malpractice suit was filed against a physician with two separate professional liability policies.

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Bad Faith Blog
February 5, 2017

No Excess Judgment, No Problem: Excess Insurer Has Claim Against Primary Insurer

Summary: An employer’s excess insurer brought an action for bad faith against the primary insurer, which had defended the employer against a worker’s personal injury action that resulted in a settlement in excess of the primary insurer’s limits. The excess insurer alleged the primary insurer should have settled the case within the primary carrier’s policy’s limits. The trial court dismissed the claim finding it was not actionable when there was no excess judgment entered against the insured. The Court of Appeals reversed and remanded.

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Bad Faith Blog
December 5, 2013

Primary v. Excess Wars Continued

An excess liability insurance carrier filed a state court declaratory judgment action seeking a declaration that a primary liability insurer was obligated to pay the entire judgment against the insured, as well as prejudgment interest and costs. After removal to federal court, the primary insurer counterclaimed seeking a declaratory judgment that the excess carrier was liable for equitable indemnity and equitable subrogation. The district court ruled that the primary insurer had a claim for equitable subrogation (not equitable indemnity), but that jury questions remained regarding whether the excess insurer had unreasonably refused to settle the underlying personal injury action within its policy limits.

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