When facing allegations of bad faith in an insurance coverage dispute, insurers have a number of defenses at their disposal. Plaintiffs’ attorneys are increasingly using bad-faith insurance claims in pursuit of compensation on behalf of their clients; and, as this area of the law has developed, at BG&S, LLP we have been successful in using a variety of defenses to shield our clients from liability for alleged bad-faith denials.

However, mounting a reactionary defense is not the only way to overcome an allegation of insurance bad faith. In many cases, insurers can assert affirmative claims and use other aggressive litigation tactics to defeat these types of claims as well.

Asserting Affirmative Claims in Response to Allegations of Bad Faith

Depending on the circumstances at hand, an insurer may be able to assert a number of affirmative claims in order to overcome a policyholder’s allegations of bad faith. One of the simplest examples would be asserting a claim that the policyholder has not paid his or her deductible. Other possible examples include:

  • Asserting that prior claims were overpaid;
  • Asserting that there are outstanding amounts for which the insurer is entitled to reimbursement; and,
  • Asserting that the insurer has grounds to rescind or reform the policy.

In addition, the Supreme Court of New Jersey and various other courts around the country have held that insurance companies are entitled to seek reimbursement of their defense costs for defending against non-covered claims.

Using Aggressive Litigation Tactics in Defense of Bad Faith Insurance Claims

Beyond asserting various legal defenses and affirmative claims, making use of aggressive litigation tactics can be an effective strategy for defeating bad faith insurance claims as well. For example, while plaintiffs’ attorneys routinely use burdensome discovery requests to try to induce settlement, under appropriate circumstances insurance companies can make strategic use of their discovery requests as well. By compelling the plaintiff to produce documentary support for his or her allegations (which is often sparse at best), insurers can often put themselves in a strong position to pursue an early dispositive motion and avoid further unnecessary litigation.

Even in a case where the plaintiff may have evidence to support a colorable claim, by being aggressive in discovery, insurers can send the message that they will not simply roll over in the face of an allegation of bad faith. In addition, by seeking discovery early, insurance companies can put themselves in a better position to make informed decisions about the substantive issues involved in the litigation.

Speak with an Insurance Defense Litigation Attorney at BG&S, LLP

BG&S, LLP is an insurance defense law firm with offices in New York and New Jersey. Our firm’s attorneys have extensive experience representing leading insurance companies in cases involving allegations of bad faith insurance denials. If you would like to schedule an initial consultation with one of our defense lawyers, please call (631) 390-0010 or get in touch with us online today.

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