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In insurance coverage litigation, bad faith claims are somewhat common. Bad faith actions, under section 155 of the Illinois Insurance Code, provide a remedy to insureds for an insurance company’s vexatious and unreasonable refusal to honor its contract with the insured.
One of the most important considerations in insurance coverage cases is determining whether an insurance company has a duty to defend and a duty to indemnify its insured. But how is this determination of insurance coverage made?
The Law Division of the Cook County Circuit Court rang in the New Year with a new HIPAA Qualified Protective Order (QPO) following Judge John Ehrlich’s memorandum opinion in Shull v. Ellis, No. 15 L 9759. The New HIPAA QPO requires a party claiming personal injury to consent to an explicit waiver for other parties, including insurance companies, to use that party’s private health information (PHI). The Health Insurance Portability and Accountability Act (“HIPAA”) does not apply to property and casualty insurance companies. However, the Cook County Law Division’s new HIPAA Qualified Protective Order will affect property and casualty insurance companies in the following ways:
When the holiday season rolls around, most people think of thanksgiving dinners, Christmas shopping and spending time with family and friends. As folks prepare for the holiday season, insurance defense counsel prepare for the increased potential for year-end insurance settlements. Both the plaintiffs and the defendants have incentives for settling cases before the beginning of the new year. Plaintiff’s would enjoy some extra shopping money for the holidays. From a tax perspective, money received in the current year is better than turning the tax calendar year over, since taxes are usually only going up. This is an incentive for individual plaintiffs and their attorneys to receive the settlement money and fees before the next tax year.
Insurance coverage for underinsured and uninsured motorist coverage laws are often times confusing. One source of such confusion is the determination of coverage owed when there are multiple tortfeasors. The recent case of Illinois Emcasco Ins. Co. v. Tufano, 2016 IL App (1st) 151196 provides guidance in this circumstance.
When it comes to insurance coverage litigation, a key tool used in coverage disputes is the declaratory judgment action. Once an insurance company determines that a declaratory judgment action must be filed to determine insurance coverage under its policy, there are certain parties that must be named as defendants for the complaint to survive dismissal.
Every personal injury lawsuit has two areas of investigation: liability and damages. The majority of a claimant’s damages consist of medical treatment. Before insurance defense counsel can completely prepare for a claimant’s deposition, he or she must obtain an accurate picture of claimant’s medical history for the alleged injury.
Insurance adjusters are swamped with claims of all sizes, but not every claim is a major injury or a wrongful death. Some claims could be small, soft tissue claims with $3,000 in medical bills or a $2,000 rear-end subrogation action. These claims are usually filed in the small claims division of the courts. In Cook County and the collar counties, these small claims divisions have different names, but Illinois Rules of Civil Procedure and Illinois Supreme Court Rules still apply.
In determining insurance coverage, an insurer’s duty to defend its insured is much broader than its duty to indemnify. In order to determine whether the insurer’s duty to defend has arisen, the court must compare the allegations of the underlying complaint to the policy language. Those allegations must be liberally construed in favor of the insured. If the court determines the allegations fall within, or potentially within, the policy’s coverage, the insurer has a duty to defend the insured against the underlying complaint. Outboard Marine Corporation v. Liberty Mutual Insurance Company, 154 Ill.2d 90, 125, (Ill. 1992) (citations omitted). If the underlying complaint alleges several theories of recovery against the insured, the duty to defend arises even if only one such theory is within the potential coverage of the policy. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 74 (Ill. 1991).
Whether there is insurance coverage for a loss known by the insured prior to purchasing an insurance policy depends on several factual issues. By its very nature, insurance is fundamentally based on contingent risks which may or may not occur. One dictionary defines “insurance” as “a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event and is applicable only to some contingency or act to occur in the future.” The risk ceases to be contingent and becomes a probable or known loss when the insured knows or has reason to know when purchasing a commercial general liability policy that there is a substantial probability that it will suffer or has already suffered a loss. Under such circumstances, the loss is uninsurable under that policy unless the insurer otherwise agrees because the “risk of liability is no longer unknown.” Therefore, the insurer has no duty to defend or indemnify the insured with respect to the known loss unless the parties intended the known loss to be covered. Outboard Marine Corporation v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 103-104 (Ill. 1992) (citations omitted).
