What Is The Time for Responding to a Defense Tender?
Insurers must acknowledge and act reasonably promptly upon communications with respect to claims, D.C. Code § 31-2231.17(b), but there are no regulations, statutes or case law defining “reasonably promptly.”
Insurers must promptly affirm or deny coverage, reserving any appropriate defenses, within a reasonable time after having completed its investigation, D.C. Code § 31-2231.17(b) but there are no regulations, statutes or case law defining “promptly.”
Does Reserving Rights Create a Conflict of Interest?
No inherent conflict, however concerns arise when independent counsel is appointed under a reservation of rights. O’Connell v. The Home Insurance Co., 1990 WL 137386 * 4 (D.D.C. September 10, 1990).
Does a Reservation of Rights Create Additional Duties?
No cases found.
What Must Be Done If A Conflict of Interest Exists?
If there is an actual conflict of interest, independent counsel paid for by the insurer may be required. Brohawn v. Transamerica Ins. Co., 347 A.2d 842, 854 (Md. 1975) (D.C. looks to Maryland land in cases where D.C. law is silent on a given issue).
Who Is Responsible for Fees of Independent Counsel?
The mere presence of a bad faith failure to settle does not create an actual conflict so as to entitle the insured to reimbursement for its own independent counsel fees incurred in the defense of the case. Allstate Ins. Co. v. Campbell, 639 A.2d 652, 659 (Md. 1994).
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
What Actions May Result in a Claim for Bad Faith?
The D.C. Court of Appeals has specifically rejected a common law tort in for bad faith against an insurer in handling a first party claim. Choharis v. State Farm Fire & Cas. Co., 961 A.2d 1080, 1087 (D.C. 2008).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
No, since the District of Columbia does not recognize a cause of action in tort for bad faith by an insurer.
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
No, since the District of Columbia does not recognize a cause of action in tort for bad faith by an insurer.
Alternative Coverage Options
If issue on which coverage is denied by insurer were not the ultimate issue to be determined in a pending suit by a third party, insurer could appropriately obtain a declaratory judgment, but if question to be resolved in the declaratory judgment action would be decided in pending actions, it would be inappropriate to grant a declaratory judgment. Brohawn v. Transamerica Ins. Co., 347 A.2d 842, 847 (Md. 1975).
Relevant Statutes
Declaratory Judgment – D.C. Ct. R. 57
“The procedure for obtaining a declaratory judgment pursuant to Title 28 U.S.C. § 2201 or otherwise shall be in accordance with these Rules, and the right to trial by jury may be demanded under the circumstances and in the manner provided in Rules 38 and 39. The existence of another adequate remedy does not preclude a judgment for declaratory relief in case where it is appropriate. The Court may order a speedy hearing of an action for a declaratory judgment and may advance it on the calendar.”
Unfair claim settlement practices statute – D.C. Code §31-2231.17
No private cause of action exists under statute prohibiting unfair insurance claim settlement practices. D.C. Code §31-2231.02(a).