United States: Good to know: tip of the month from the Lowenstein Insurance Recovery Group
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Insurance companies are reviving an old trend called leapfrog for coverage litigation, where an insurer rushes to the courthouse before the insured can file a complaint. The reason for the leapfrog? Some forums offer a real or perceived benefit to carriers. For example, some state laws may limit a carrier’s final payment by distributing payments among multiple carriers. Other state laws could eliminate a policyholder’s recovery based on established case law interpreting certain provisions of the policy. Or consider cases related to the pandemic, where carriers have preferred to litigate in federal courts rather than state courts, likely out of fear that a jury from a state court, which tends to be more localized. , or sympathetic to a local insured and hostile to a carrier. Whatever the reason, here are four steps to avoid being overwhelmed by your carrier:
- Assess the risk.
- Does the policy include a forum selection clause requiring parties to testify in a particular court, or does it include a choice of law provision that would apply the laws of a certain state, regardless of the place where the lawsuit is filed?
- Determine your favorable forums.
- Identify possible forums and determine which one offers the most favorable case law.
- Write your complaint strategically.
- Bring to the fore all the facts that support jurisdiction in a particular forum, such as where the policy was issued or where the claim took place.
- If your carrier overtakes you, then drop it in your favorite forum as soon as possible.
- Do not give in to the carrier’s lawsuit if there is another forum. Instead, continue your pursuit in the best applicable forum for you.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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