What Is The Time for Responding to a Defense Tender?
An insurer must “promptly acknowledge pertinent communications with respect to claims arising under insurance policies.” Wis. Admin. Code Ins. § 6.11(3)(1). The statute defines “prompt” or “promptly,” providing that these terms “shall mean responsive action within 10 consecutive days from receipt of a communication concerning a claim.” Wis. Admin. Code Ins. § 6.11(4).
An insurer must affirm or deny coverage within a reasonable time after proof of loss has been completed.” Wis. Admin. Code Ins. § 6.11(3)(7).
Does Reserving Rights Create a Conflict of Interest?
An insurer’s reservation of rights provides the insured with the right to control the defense. Radke v. Fireman’s Fund Ins. Co., 577 N.W.2d 366, 369 (Wis. Ct. App. 1998).
Does a Reservation of Rights Create Additional Duties?
No cases found.
What Must Be Done If A Conflict of Interest Exists?
No cases found.
Who Is Responsible for Fees of Independent Counsel?
If an insurer reserves it rights, the insured is afforded the opportunity to have a defense not subject to the control of the insurer although the insurer remains liable for the legal fees incurred. Jacob v. West Bend Mut. Ins. Co., 553 N.W.2d 800, 806 (Wis. Ct. App. 1996).
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
An insurance company owes a duty to its insured to settle or compromise a claim made against the insured and to act in good faith in doing so. Roehl Transport v. Liberty Mut. Ins. Co., 784 N.W.2d 542, 546 (Wis. 2010).
What Actions May Result in a Claim for Bad Faith?
Wisconsin recognizes the tort of bad faith in claims by insureds against insurers. Anderson v. Continental Ins. Co., 271 N.W.2d 368, 375-376 (Wis. 1978). “To show a claim for bad faith, a plaintiff must show the absence of a reasonable basis for denying benefits of the policy and the defendant’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.” Anderson v. Continental Ins. Co., 271 N.W.2d 368, 376-377 (Wis. 1978).
An insurer was liable for its bad faith refusal to settle a claim, even though the award did not exceed the amount of insurance coverage, the insurer showed bad faith in failing to settle for less than the full deductible. Roehl Transport v. Liberty Mut. Ins. Co., 784 N.W.2d 542, 546 (Wis. 2010).
Wisconsin’s unfair claims settlement practices act does not provide for a private right of action against insurers, but violations of the act may be used as evidence of bad faith. Heyden v. Safeco Title Ins. Co., 498 N.W.2d 905, 910 (Wis. Ct. App. 1993), overruled on other grounds by Weiss v. United Fire and Cas. Co., 541 N.W.2d 753 (Wis. 1995).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
Yes, but attorney fees incurred in proving a bad faith claim are not awarded as attorney fees, but rather as an item of damages caused by an insurer’s bad faith refusal to pay benefits owed.” Danner v. Auto-Owners Ins., 629 N.W.2d 159, 164 (Wis. 2001).
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
Punitive damages are available is the insured can show: (1) evil intent deserving of punishment or of something in the nature of special ill-will; or (2) wanton disregard of duty; or (3) gross or outrageous conduct. Anderson v. Continental Ins. Co., 271 N.W.2d 368 (Wis. 1978).
Alternative Coverage Options
An insurer may raise coverage and duty to defend issues in several ways, including seeking a declaratory judgment. Baumann v. Elliot, 704 N.W.2d 361, 366 (Wis. Ct. App. 2005).
Relevant Statutes
Declaratory Judgment – Wis. Code § 806.04
“Courts of record 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 declarations shall have the force and effect of a final judgment or decree, except that finality for purposes of filing an appeal as of right shall be determined in accordance with s. 808.03 (1).”