What Is The Time for Responding to a Defense Tender?
Insurers must acknowledge and act promptly upon communications about claims. Utah Code § 31A-26-203(3)(a). There are no regulations, statues or cases that further define “promptly.”
Insurers must “promptly provide the insured a reasonable explanation of the basis for denial of a claim or for the offer of a compromise settlement. Utah Code § 31A-26-203. There are no regulations, statues or cases that further define “promptly.”
Does Reserving Rights Create a Conflict of Interest?
While Utah courts have not addressed this issue directly, the 8th Circuit, predicting Utah law, held that where there is a conflict between the insurer’s interest and that of the insured, the insurer must either provide an independent attorney to represent the insured or pay the costs incurred by the insured in hiring counsel of its own choice. U.S. Fid. & Guar. Co. v. Louis A. Roser Co., 585 F.2d 932, 939 n. 6 (8th Cir. 1978) (Utah and Minnesota law).
Does a Reservation of Rights Create Additional Duties?
No cases found.
What Must Be Done If A Conflict of Interest Exists?
See above. U.S. Fid. & Guar. Co. v. Louis A. Roser Co., 585 F.2d 932 (8th Cir. 1978) (Utah and Minnesota law).
Who Is Responsible for Fees of Independent Counsel?
The insurer. U.S. Fid. & Guar. Co. v. Louis A. Roser Co., 585 F.2d 932 (8th Cir. 1978) (Utah and Minnesota law).
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
An insurer has an implied obligation to act in good faith in all aspects of claim handling. Billings v. Union Bankers Ins. Co., 918 P.2d 461, 466 (Utah 1996).
What Actions May Result in a Claim for Bad Faith?
Utah does not recognize the tort of bad faith in the first-party insurance context. Beck v. Farmers Ins. Exch., 701 P.2d 795, 800 (Utah 1985).
An insurer does owe to the insured a good faith duty to bargain or settle under an insurance contract, which is only one aspect of the duty of good faith and fair dealing implied in all contracts. A violation of that duty gives rise to a claim for breach of contract.” Beck v. Farmers Ins. Exch., 701 P.2d 795, 798 (Utah 1985).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
Attorney’s fees may be awarded where the insurer has breached the implied obligation of good faith and fair dealing, even absent evidence of actual bad faith. Billings v. Union Bankers Ins. Co., 918 P.2d 461 (Utah 1996); see Utah Code § 78B-5-825.5.
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
No cases found.
Alternative Coverage Options
Where it is uncertain whether an insurer has a duty to defend, clarification can be achieved through a declaratory judgment. Deseret Federal Sav. & Loan Ass’n v. USF&G Co., 714 P.2d 1143, 1147 (Utah 1986).
Relevant Statutes
Declaratory Judgment – Utah Code § 78B-6-401
“The district courts within their respective jurisdictions shall have power to declare rights, status, and other legal relations, whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declaration shall have the force and effect of a final judgment or decree.”