What Is The Time for Responding to a Defense Tender?
Insurers must acknowledge and act reasonably promptly upon communications with respect to claims, Wyo. Stat. Ann. § 26-13-124(a)(ii), but there are no regulations, statutes or case law which define “reasonably promptly.”
Insurers must affirm or deny coverage within a reasonable time after proof of loss, Wyo. Stat. Ann. § 26-13-124(a)(v), but there are no regulations, statutes or case law which further define what is a reasonable time.
Does Reserving Rights Create a Conflict of Interest?
See below.
Does a Reservation of Rights Create Additional Duties?
None found.
What Must Be Done If A Conflict of Interest Exists?
Conflicts of interest are not likely to arise, as an insurer must choose either to deny the defense or assume the defense and seek declaratory judgment as to indemnity. Shosone First Bank v. Pacific Employers Ins. Co., 2 P.3d 56 (Wyo. 2000).
Who Is Responsible for Fees of Independent Counsel?
See above.
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
What Actions May Result in a Claim for Bad Faith?
To show a claim for bad faith, an insured must show the absence of a reasonable basis for denying benefits of the policy and the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. McCullough v. Golden Rule Ins. Co., 789 P.2d 855, 860 (Wyo. 1990).
A cause of action for bad faith will lie when a liability insurer fails in bad faith to settle a third-party claim within policy limits against its insured. Bad faith in this context would occur if an excess judgment were obtained under circumstances when the insurer failed “to exercise intelligence, good faith, and honest and conscientious fidelity to the common interest of the [insured] as well as of the [insurer] and [to] give at least equal consideration to the interest of the insured.” Herrig v. Herrig, 844 P.2d 487, 490 (Wyo. 1992).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
Possibly. Herrig v. Herrig, 844 P.2d 487, 494-95 (Wyo. 1992); Wyo. Stat. §26-15-124(c).
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
Yes for the insurer’s willful and wanton conduct. McCullough v. Golden Rule Ins. Co. 789 P.2d 855, 860- 861 (Wyo. 1990).
Alternative Coverage Options
Conflicts of interest are not likely to arise, as an insurer must choose either to deny the defense or assume the defense and seek declaratory judgment as to indemnity. Shosone First Bank v. Pacific Employers Ins. Co., 2 P.3d 56 (Wyo. 2000).
An action for declaratory relief should not be decided in advance of the underlying liability case if coverage turns on an issue that is “crucial to the determination of the underlying liability.” Morris v. Farmers Ins. Exchange, 771 P.2d 1206 (Wyo. 1989).
Relevant Statutes
Declaratory Judgment – Wyo. Stat. § 1-37-102.
“Courts of record within their respective jurisdictions may 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 have the force and effect of a final judgment.”
Wyoming’s Unfair Claims Settlement Practices Act, Wyo. Stat. §26-13-124, does not create a private right of action. Herrig v. Herrig, 844 P.2d 487, 494 (Wyo. 1992).