Eroding Limits and Exhaustion of Limits Although policy limits generally constitute the boundaries of the insurer’s indemnity obligations, most liability policies do not limit the amount an insurer must pay in defense of claims. One way an insurer may limit defense costs and its overall exposure is through the use…
Providing a defense when the insurer reserves its rights The most common problem that arises in the “tripartite relationship” occurs when the carrier undertakes the defense of the insured pursuant to a reservation of rights. In such cases, it is possible for an insurer to take less interest in paying…
The Tripartite Relationship When a liability insurer retains defense counsel to represent an insured, the resulting relationship among the three parties is often called a “tripartite relationship.” This relationship is unique in the insurance context. Georgia, like a majority of states, generally holds that the defense attorney has two clients:…
Unfair Claims Practices Act Georgia’s Unfair Claims Settlement Practices Act is designed “to set forth standards for the investigation and disposition of claims arising under policies or certificates of insurance issued to residents of Georgia.” The UCSPA does not cover claims involving workers’ compensation, fidelity, or surety insurance. The Act…
No Action Clause Many policies contain a provision limiting the amount of time in which an insured can bring suit against its insurer, effectively reducing the statute of limitations by way of contractual agreement. Such a contractual limitation or “no-action” clause provides that any suit against the insurer arising out…
Duty To Defend Multiple Insureds Where there are multiple insureds under a single policy, each insured is entitled to a separate defense. An insurer owes a duty of good faith and fair dealing to each insured. An additional insured, however, may have to elect coverage under the policy by notifying…
Duty To Defend And Exhaustion Of Policy Limits Generally, an insurer does not have a continued duty to defend its insured after the insurer has exhausted policy limits by settling multiple claims with the insured’s consent, even though there might be additional claims arising from the same accident. In Liberty…
Duty To Defend An important value provided by a liability policy is the insurer’s promise to retain attorneys to handle the defense of a lawsuit on behalf of an insured. An insurer’s failure to defend sometimes accompanies the insurer’s failure to take advantage of a reasonable opportunity to settle within…
What Is “UM” Coverage? “UM” coverage is an optional coverage that an insured may purchase to cover the insured who is injured by the negligence of another person who has no liability coverage or insufficient liability coverage to compensate the insured for his or her injuries. Like any insurance policy,…
Whether reasonableness of late notice can be decided as a matter of law, or whether it should remain in the province of the jury depends on two factors: the sufficiency of the excuse insured’s diligence after any disability has been removed OneBeacon Am. Ins. Co. v. Catholic Diocese of Savannah…