Insurance Coverage and Bad Faith Law

Insurance Coverage and Bad Faith law

Houston Harbaugh has built a strong reputation over the past several decades, representing insurance companies facing the full spectrum of complex legal challenges. No matter how big or critical the challenge, clients turn to Houston Harbaugh’s Insurance Coverage and Bad Faith attorneys for our legal and our business insights.

Because our insurance industry clients must constantly work to stay ahead of changes in society, in business and in the regulatory climate, we’re committed to staying on top of the issues of today and tomorrow, such as cyber-insurance, and insurance for advanced technology sectors, artificial intelligence players, machine learning companies, and autonomous vehicles makers and users.

At the heart of Houston Harbaugh’s Insurance Coverage and Bad Faith practice are first-party and third-party insurance coverage and bad faith claims.

Houston Harbaugh has represented insurance companies in insurance coverage and bad faith litigation filed in federal and state courts involving a wide variety of matters arising under numerous types of insurance policies, including commercial general liability policies, directors’ and officers’ liability policies, property and casualty policies, professional errors and omissions policies, umbrella and excess policies, life and disability insurance policies, and manuscripted policies covering special risks. The firm routinely provides guidance and advice on all types of insurance.

Our understanding of the insurance industry has enabled us to successfully counsel our clients on claims involving coverage and bad faith claims and, if necessary, litigate suits including trial when they cannot otherwise be resolved. Our attorneys have extensive experience handling issues that arise during discovery, motions practice, trial, and appeal of insurance coverage and bad faith claims.

The areas of insurance coverage in which we have significant experience include:

General Liability, Construction Defects and Complex Tort Coverage

Our Insurance Coverage and Bad Faith attorneys have wide-ranging experience in handling coverage disputes involving construction projects and construction defects, mass toxic tort claims arising out of exposures to various toxic substances, defective products, intellectual property disputes and the release of hazardous substances, natural gas production wastewaters and other contaminants onto the ground and into surface and groundwaters. Our attorneys are well practiced in the interpretation of insurance policies, including primary, umbrella, and excess policies in this area. In particular, issues involving bodily injury, occurrence, exhaustion, trigger of coverage, notice, ultimate net loss, pollution exclusions, and earth movement exclusion have all been analyzed and litigated by the Houston Harbaugh attorneys.

Excess and Surplus Lines

Our attorneys work extensively in coverage related issues pertaining to the excess and surplus market. Excess policies provide limits above an underlying liability policy. The underlying liability policy is often an umbrella policy and the excess policy provides additional limits of insurance often following form to the umbrella policy. Issues that often arise in the excess policy arena pertain to allocation, “ultimate net loss” exhaustion and underwriting processes.

Advertising Injury and Intellectual Property Loss

Advertising injury claims include libel, slander or commercial disparagement, trademark and trade dress infringement, copyright infringement, patent infringement, theft of trade secrets, and unfair competition. Issues that arise in this area can include whether the insured’s actions fall within the definition of “advertising injury,” the requirement of a causal connection to injuries, and the applicability of exclusions, including the “knowledge of falsity” exclusion. Our attorneys are experienced in evaluating such claims and counseling insurance carriers on these issues.

Life, Health, and Disability Insurance

Our attorneys have extensive experience representing large, regional, and small insurance companies in litigating claims involving life, disability, long-term care, Medicare supplement, specified-disease and critical illness insurance policies, as well as annuities and retirement plans. Our attorneys have litigated a vast array of issues in relation to these products including, wrongful denial of benefits, rescission of policies, policy lapse issues, beneficiary disputes, and issues involving failure to provide proofs of loss, and are well-acquainted with statutes and regulations that govern these products. Our attorneys also frequently litigate claims for misrepresentation, fraud and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law asserted against insurance companies and their agents in relation to the sale of life, health and disability policies, as well bad faith claims asserted against insurance companies involving these policies. Additionally, our attorneys have experience representing insurance companies in commission disputes with their brokers and agents with respect to the sale of life, health and disability policies.

Bad Faith and Extra-Contractual Liability

Houston Harbaugh’s attorneys defend insurers in claims involving breach of contract, underwriting practices, consumer fraud and extra-contractual claims.

We work to help minimize insurers’ exposure to bad faith claims by providing practical counsel that is business-minded and legally sound at the claims handling stage. We strive to minimize the chances of an insured using bad faith allegations as a litigation tactic to force payment on claims that may lack merit. We can help formulate strategies to best handle mediations and settlement conferences, with a vision of avoiding bad faith traps.

Bad faith and extra-contractual claims are among the most complex and high-stakes matters that insurance companies face. These claims, if successful, can expose insurance companies to punitive damages, attorneys’ fee awards, and other damages well in excess of insurance policy limits.

These claims are fact-specific and focus on the insurance company’s conduct and claims handling practices rather than the express provisions of the insurance policy. Bad faith claims are often asserted by policyholders against insurance carriers for, among other things, failure to defend or settle third-party claims, wrongful denial of coverage for first-party claims, and unreasonable delay in claims handling.  Our attorneys have years of experience in defending insurance carriers against bad faith claims and have tried to verdict numerous high-stakes bad faith suits, including those arising under the Pennsylvania Bad Faith statute, 42 Pa.C.S. § 8371.

  • Representation of excess insurer in coverage and bad faith actions involving multiple underlying claims arising out of exposures to asbestos, silica and coal dust.
  • Representation of insurer in coverage action brought by insured involving copyright infringement judgment. OneBeacon Ins. Co. v. William A. Graham Co. et al., No. 2009-41636 (C.P. Montgomery Cty. Dec. 14, 2011) aff’d60 A.3d 586 (Pa. Super. 2012).
  • Representation of insurer in coverage action involving claims made coverage for professional services. Reported decision; McMillen Engineering, Inc. v. The Travelers Indemnity Co. 744 F. Supp. 2d 416 (W.D. Pa. 2010).
  • Representation of insurer in action for coverage and bad faith arising out of claims against policyholder under FACTA. Reported decision, Whole Enchilada, Inc., v. Travelers Prop. Cas. Co., 581 F. Supp. 2d 677 (W.D. Pa. 2008).
  • Representation of insurer in coverage dispute pertaining to spills of natural gas wastewaters under environmental pollution coverage policies.
  • Representation of an insurance carrier in an action initiated by a Fortune 500 company seeking in excess of $100 million insurance coverage for the costs of completing the environmental cleanup of 25 sites contaminated by hazardous wastes and substances.
  • Representation of excess insurers in indemnity dispute arising from national class action settlement in excess of $100 million involving a national restaurant chain.
  • Representation of insurance companies in coverage litigation brought by manufacturers of tobacco products seeking coverage for third-party personal injury claims allegedly arising out of use of tobacco products.
  • Representation of insurers in dispute regarding coverage for claims arising out of defective natural gas pipeline products installed in homes.
  • Representation of life insurance companies in litigation involving wrongful denial of life insurance benefits.
  • Representation of long-term care insurance company in litigation involving denial of benefits and alleged bad faith.
  • Representation of annuity company in litigation involving sale tactics.
  • Representation of an insurer against claim for coverage brought by persons exposed to asbestos who had not yet been diagnosed with disease. Reported decision Erdely v. Hinchcliffe and Keener, Inc., et al., 875 A.2d 1078 (Pa. Super. 2005), appeal denied, 890 A.2d 1059 (Pa. 2005).
  • Representation of insurance company involving coverage issues raised by multiple actions arising out of contaminated pharmaceutical products.
  • Representation of insurer against claims for coverage arising from construction defects throughout a planned housing community. Northridge Village, LP v. Travelers Indemnity Co. of Ct., No. 15-1947, 2017 WL 3776621 (E.D. Pa. August 31, 2017)
  • Representation of insurance companies in bankruptcy court involving coverage disputes arising out of asbestos liabilities and attempts to assign policy rights to a trust under plans of reorganization.
  • Representation of insurer and reinsurer in claims for coverage and bad faith arising from alleged property damage and equipment breakdown.
  • Representation of insurance company which issued environmental remediation bonds in forfeiture litigation initiated by Pennsylvania Department of Environmental protection
  • Representation of insurers in actions for bad faith arising out of underinsured and uninsured motorist claims.
  • Representation of insurers in actions challenging the validity of auto underinsured motorist stacking waiver forms.
  • Representation of insurer in actions seeking coverage and bad faith under first party property policies.
  • Defense of corporate managing general agent in litigation brought by insurer alleging negligence in insurance underwriting and claims management activities.
  • Representation of insurers against claims for coverage arising from mass toxic tort claims and alleged bad faith.
  • Representation of an insurance company in a coverage action involving alleged property damage and advertising injury coverage for alleged violations of the Telephone Consumer Protection Act. Reported decision Melrose Hotel Co. v. St. Paul Fire and Marine Ins. Co. 432 F. Supp. 2d 488 (E.D. Pa. 2006), aff’d, 2007 U.S. App. LEXIS 22711 (3d Cir. Sept. 25, 2007).
  • Representation of an insurance company in a coverage action involving an underlying copyright infringement lawsuit and a determination of whether there was “advertising injury” under four commercial general liability policies issued to the corporation by the insurer.