Far too frequently, policyholders miss the opportunity to get the benefit of the insurance coverage they purchased by accepting a “no” from the insurer that should have been a “yes.” We see this scenario play out over and over: An insurer rejects a claim that is covered, with the expectation that the policyholder will be frightened off by a densely worded denial letter filled with exclusionary language. If the policyholder persists, the insurer often files a lawsuit, hoping that the expense and delay associated with litigation will deter the policyholder from enforcing its rights. But in the past year, Goodman Law Group | Chicago (GLG) has charted a different course, helping our clients obtain the coverage to which they were entitled and recover the litigation expense they incurred to enforce their rights based on the insurers’ “bad faith” mishandling of the claims.
In one instance, a general contractor was sued by the owner of a construction project for damage that resulted from the negligence of its subcontractors. The contractor tendered its defense to its insurer, triggering a frustrating and expensive series of events that ended in a settlement but no coverage. At that point, the contractor hired GLG. We made a demand on the insurer for reimbursement of the client’s defense costs and settlement. The insurer sued our client (for the second time!), but we fought back aggressively. Our claims for breach of contract and bad faith ultimately forced the insurer to surrender and allowed the contractor to recover (1) its defense costs in the litigation against the owner; (2) the funds our client paid to settle with the owner; and (3) the costs it incurred in the coverage litigation.
In a similar instance, a client found itself embroiled in baseless but costly litigation. When the insurer rejected the tender of our client’s defense based on a plainly inapplicable exclusion, we once again applied intense pressure and secured a favorable settlement. Our client recovered not only the benefit of a defense against the insurer’s meritless claim but also the legal fees it incurred in the enforcement of its rights.
The common thread in these two bad faith recoveries—aside from thrilled clients—was flawed coverage positions by insurers resting on exclusions that, on the surface, appeared to apply. Drawing on our attention to detail and acumen gained from decades of experience, we successfully navigated the claims, securing the benefit of the insurance coverage that our clients purchased and recovering the cost incurred to enforce their rights.
If you have questions about insurance recovery or other commercial insurance-related concerns, please contact David Goodman at dg@glgchicago.com or 312 626 1890.