November 20, 2017 Articles

Bad-Faith Claims in Louisiana

Claims of bad faith, once rare, are now often par for the course when defense is denied or a settlement offer is rejected, and have the potential to affect practitioners who represent insurers, insureds, and plaintiffs alike

by James R. Sutterfield with Laken N. Davis

A claim of insurer “bad faith” sets off alarm bells for any insurer and its counsel. It brings a whole new field of law into the litigation. Before, the focus was on liability and damages. Once a bad-faith claim is asserted, a tedious examination of the facts and claims handling, beginning with first notice of the loss, is required. This article discusses three types of “bad faith” claims under Louisiana law:

1. claim alleging bad faith based on failure to settle within policy limits;

2. claims of bad faith asserted by third parties; and

3. claims of bad faith based on failure to defend.

Each circumstance is addressed below.[2]

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