Insurance policies are not ordinary commercial contracts. In an ordinary contract, the parties are seeking a mutually beneficial arrangement. In an insurance contract, the insured pays today for the promise of protection in the future. That protection may take the form of a defense and indemnity in the event the insured is sued, or a promise to repair a damaged or destroyed home. This unequal relationship puts insureds in a uniquely vulnerable position. When one party to a contract is focused on profit and the other on protection, disputes often arise.
The nature of these disputes also depends on the kind of insurance policy at issue. With liability policies, insurance companies have three primary jobs—defend their insureds, settle within the policy limits if possible, and pay any judgment up to those limits if settlement is impossible. When the insurance company provides property insurance or underinsured motorist coverage, the insurer’s obligation is to conduct a reasonable investigation and promptly pay covered claims. The lawyers at Ogborn Mihm help both business and individual clients get insurance companies to fulfill their duty of good faith and fair dealing.
The Insurance Company’s Duties
At the heart of every insurance policy is a duty of good faith and fair dealing. This means not profiting at the expense of the other party to the contract. In the context of liability insurance, it means the insurance company has to give its insured’s interests equal consideration to its own. In the context of direct coverage under an underinsured motorist policy or a homeowners’ policy, the insurance company has to act reasonably to communicate with its insured, investigate the claim, place a fair and reasonable value on the claim, and promptly pay the claim.
First Party Insurance Claims
When you’re dealing with your own insurer, you’re making a first party claim. In these cases, both the insurer and the insured’s obligations will be specified in the insurance policy. The claim’s focus is whether the insurer acted unreasonably under the circumstances and whether it knew or recklessly disregarded facts. If you are the insured, you must comply with the insurance policy and provide your insurance company with necessary information. The lawyers at Ogborn Mihm navigate the terms of insurance policies to help get benefits owed and, if need be, litigate claims against the insurer.
Statutory First Party Insurance Claims
In Colorado, an insured can bring a claim where their insurer unreasonably denies or delays payment. Insurance companies face increased liability and must pay attorney fees to their insureds in these cases. There is no requirement that the insured prove the insurer knew it was acting unreasonably or was reckless in disregarding facts. However, the insured still has a duty to cooperate with the insurer and provide it with necessary information. The lawyers at Ogborn Mihm litigate claims under Colorado’s statutory party bad faith laws and can help our clients ensure that their claims are paid in a prompt fashion.
Third Party Insurance Bad Faith
Liability policies generally require insurers to do two things: defend and indemnify. The first requires insurance companies to hire counsel to defend their insureds. The second requires insurers to pay any judgment on a covered claim, within the policy limits. Insurance companies must take reasonable steps to protect their insureds from loss by settling claims within policy limits. An insurer’s failure to pursue settlement or defend an insured may be bad faith. Ogborn Mihm’s insurance dispute lawyers help clients whose insurers have wrongfully denied coverage or who may benefit from assignment of such a claim.
Personal Insurance Dispute Counsel
When an insurance company hires counsel to defend an insured, those lawyers usually come from a preferred list. This counsel is your lawyer – not the insurance company’s – and thus has your interests at heart. They represent your interests in order to get your case settled without exposing you to damages in excess of your policy limits, or get a commitment of protection from the insurance company. Ogborn Mihm’s insurance dispute lawyers provide personal counsel to insureds who face potential exposure from litigation and have helped those facing multimillion dollar claims persuade their insurance companies to avoid the risk of catastrophic judgments.
A medical device manufacturer we represented was facing a number of mass tort products liability lawsuits and relied upon its insurance company to defend and provide settlements. The insurance company failed to perform as it should have, and we sued the insurer for bad faith. The case involved hundreds of thousands of documents and the team at Ogborn Mihm LLP was able to obtain a significant confidential settlement for the client.
When an insurance company unreasonably refused to settle a lawsuit against its insured, our lawyers wrote the appellate briefs and successfully argued before the Colorado Supreme Court in the seminal case of Nunn v. Mid-Century Ins. Co. In the decision, the Supreme Court adopted our legal argument and decided that an insured defendant whose insurance company unreasonably refuses to settle a claim may enter into a stipulated judgment in excess of policy limits so that the insured can protect himself/herself and assign the bad faith claim to the claimant.