Artificial Intelligence (AI) is constantly revolutionizing industries, and claims handling is no exception. These advancements come with growing pains: the use of AI in claims determinations has become the subject of bad-faith litigation. Although AI is relatively new, the bad faith arguments are not. Bad faith lawsuits concerning the use of technology in claims handling…
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In 1955, the Alabama Supreme Court established a rule that loss-of-use damages in vehicle cases were recoverable only if the vehicle was repairable. Hunt v. Ward, 79 So. 2d 20, 25-26 (Ala. 1955) (the “Hunt rule”). This meant that an interested party could not recover “for both [the] total loss of an automobile and loss…
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As claim adjusters know, a thorny issue in many liability claims is whether the insured is entitled to independent counsel. Jurisdictions take three general approaches to independent counsel. In some jurisdictions, such as Mississippi, whenever a carrier is defending under a reservation of rights, the insured is entitled to independent counsel. Moeller v. American Guar….
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The cyber insurance market indisputably has experienced a “boom” in recent years, with some sources reporting more than 30% in annual growth in the market over the past decade. With this exponential growth has come a corresponding increase in cyber insurance claims, which must be fielded by adjusters in real time, often with a lack…
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Insurers who issue liability policies that include self-insured retentions (SIRs) have limited obligations to their insureds unless and until the damages and claim expenses exceed the SIR amount. So, what happens if the insured does nothing to defend themselves, resulting in the entry of a default judgment in an amount exceeding the SIR? Under Georgia…
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In Aloha Petroleum, Ltd. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 155 Haw. 108, 557 P.3d 837 (2024), Aloha Petroleum, Ltd. sought a defense from its liability insurers for separate lawsuits brought by Hawaiian municipalities. The municipalities alleged that, as of the 1960s, the fossil fuel industry knew “its products would cause catastrophic climate…
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Liability insurers are no strangers to time-limited demands sent by plaintiff’s counsel. In Georgia, these demands are called Holt demands after the seminal case S. Gen. Ins. Co. v. Holt, 416 S.E.2d 274 (Ga. 1992). In Holt, the Georgia Supreme Court held that an insurer can be liable to its insured for unreasonably declining a…
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The general rule in Alabama is that a duty to indemnify cannot be determined before liability is established. But are there exceptions to that rule? In James Snell v. United States Insurance Co., 102 F.4th 1208 (11th Cir. 2024), the Eleventh Circuit weighed in and unequivocally answered “yes.” Snell involved coverage under a commercial general…
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When defending an insured under reservation of rights, Alabama insurers often are faced with the possibility of exposure from a judgment or verdict that includes both covered and non-covered loss or damage under an insurance policy. Insurers can take multiple steps during the handling of a claim to ensure this coverage issue is addressed adequately…
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A New Jersey appeals court affirmed summary judgment for insured pharmaceutical company Merck in a cyber coverage dispute regarding a “Hostile/Warlike Action” exclusion included in a $1.75 billion “all risks” property insurance program. Merck & Co., Inc. v. Ace American Ins. Co., No. A-1879-21, A-1882-21, 2023 WL 3160845 (N.J. Sup. Ct. App. Div. 2023). …
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