skip to Main Content

ConnecticutWhat Is The Time for Responding to a Defense Tender?

Insurers must acknowledge and act reasonably promptly upon notice of claim,  Conn. Gen. Stat. § 38a-8116,  but there are no regulations, statutes or case law defining “reasonably promptly.”

Insurers must affirm or deny coverage, reserving any appropriate defenses within a reasonable time after completing their investigations, Conn. Gen. Stat. § 38a-8116 but there are no regulations, statutes or case law defining “reasonable time.”

Does Reserving Rights Create a Conflict of Interest?

No cases found.

Does a Reservation of Rights Create Additional Duties?

An insurer is required to notify its insured and obtain consent before defending under a reservation of rights.  Mundry v. Great Am. Ins. Co., 369 F.2d 678, 682 (2d Cir. 1966)(Connecticut law).

What Must Be Done If A Conflict of Interest Exists?

When an attorney represents two clients with adverse interests, it is the attorney’s duty to withdraw from the representation or to disclose the conflict of interest. Tomczuk v. Am. Mut. Ins. Co., 517 A.2d 1053, 1055 (Conn. App. 1986).

Who Is Responsible for Fees of Independent Counsel?

No cases found.

What Are Independent Counsel’s Obligations?

No cases found.

What Settlement Duties Exist?

No cases found.

What Actions May Result in a Claim for Bad Faith?

By statute, both the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Unfair Insurance Practices Act (“CUIPA”) provide a privates right of action for an insured who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by an insurer of a prohibited method, act or practice. See General Statutes § 42-110g; Carford v. Empire Fire and Marine Ins. Co., 891 A.2d 55, 59 (Conn. App. 2006).  

“To constitute a breach of the implied covenant of good faith and fair dealing, the acts by which a defendant allegedly impedes the plaintiff’s right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith.” L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn. App. 30, 46 (1986).

“Bad faith is defined as the opposite of good faith, generally implying a design to mislead or to deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation not prompted by an honest mistake as to one’s rights or duties. Bad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. It contemplates a state of mind affirmatively operating with furtive design or ill will.” Hutchinson v. Farm Family Casualty Ins. Co., 273 Conn. 33, 42 n. 4 (2005).

Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?

A trial court may award attorney’s fees to a policyholder that has prevailed in a declaratory judgment action against its insurance company only if the policyholder can prove that the insurer has engaged in bad faith conduct prior to or in the course of the litigation. Acmat Corp. v. Greater N. Y. Mut. Ins. Co., 923 A. 2d 697, 708 (Conn. 2007).

“When liability under CUTPA is established, attorney’s fees and costs may be awarded at the discretion of the court and the successful litigant must be given the opportunity at trial to provide evidence to establish a basis for the award.” Ven Nguyen v. DaSilva, 10 Conn.App. 527, 530 (1987).

Are Punitive Damages Recoverable in Insurer-Insured Dispute?

Insureds are entitled to actual damages, punitive damages, costs and reasonable attorney’s fees, and other appropriate equitable relief deemed just and proper. Conn. Gen. Stat. §42-110g (a).

Alternative Coverage Options

A declaratory judgment action is a suitable vehicle to test the rights and liabilities under an insurance policy.  St. Paul Fire & Marine Ins. Co. v. Shernow, 577 A.2d 1093, 1094 (Conn. App. 1990).

Relevant Statutes

Declaratory Judgment – Conn Gen. Stat. § 52-29.

“The Superior Court, in any action or proceeding may declare rights or other legal relations on request of such a declaration, whether or not further relief is or could be claimed.  The declaration shall have the force of a final judgment.”

Unfair Trade Practices Act – Conn. Gen. Stat. § 42-110a, et seq.

Unfair Insurance Practices Act  – Conn. Gen. Stat. §§ 38a-815 and 38a-816(6)

Neither the Supreme Court nor the Connecticut Appellate Court have ruled on whether CUIPA allows a private cause of action independent of CUTPA. Carford v. Empire Fire and Marine Ins. Co., 94 Conn. App. 41, 52-53 (2006).

Back To Top