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Insurance bad faith: Defending against costly claims

Insurance law is extremely complex, and insurance companies benefit a great deal from having experienced legal counsel to resolve coverage disputes and defend against a wide variety of tort liability claims. Attorneys at Landrum & Shouse LLP have long represented insurers throughout Kentucky in a range of matters related to tort liability, including claims of bad faith.

Matters of insurance coverage are intrinsically nuanced, and obscurity of language can easily lead to disputes. These may be negotiated out of court through methods of alternative dispute resolution, such as mediation or arbitration, or tort litigation may be necessary. Our firm's attorneys are experienced in reaching out-of-court solutions, as well as in taking cases to trial in state and federal courts.

Insurance companies facing bad faith claims may be forced to pay out exemplary and punitive damages that are worth much more than the policy in question. In other words, the risks are high when an insurer is accused of bad faith. Additionally, insurance regulatory policies differ from state to state, so national insurers should have legal counsel with specific jurisdictional knowledge.

Insurance policies are not like other kinds of contracts, as courts have found that insurers owe special duties to policyholders. When a first-party or third-party claim of bad faith arises, it is crucial that the insurer facing allegations has a legal team that is familiar with the duties of investigation, valuation and indemnification in the context of insurance law. The legal concept of insurance bad faith is not set in stone, and it is beneficial for insurers to have the guidance of attorneys who actively stay abreast of case law.

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