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What Is The Time for Responding to a Defense Tender?

The insurer has 15 working days to acknowledge the receipt of a claim notice. Del. Code Ann. tit. 18, § 2304(16)(a) and (b).

The insurer must affirm or deny coverage within 30 days after receiving proof of loss statements.  18-900-902 Del Code Regs. § 

Does Reserving Rights Create a Conflict of Interest? 

No cases found that arise in the Tripartite Relationship between Insurer, Insured, and Insurance Defense Counsel.

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?

No cases found.

What Are Independent Counsel’s Obligations?

No cases found.

What Settlement Duties Exist?

Liability insurer under duty to conduct settlement negotiations in good faith, or be liable for excess judgment, and pre-trial offer to settle for policy limits does not itself negate bad faith, when carrier had previously rejected plaintiff’s offer to settle for policy limits. Maguire v. Allstate Ins. Co., 341 F. Supp. 866, 869-870 (D. Del.1972).

What Actions May Result in a Claim for Bad Faith?

An insurer can be liable for the bad faith delay, or the nonpayment, of an insured’s claim in a breach of contract situation.  Tackett v. State Farm Fire & Cas. Inc. Co., 653 A. 2d 254 (Del. 1995).

To prevail on a bad faith claim, an insured must show that the insurer’s actions were clearly without any reasonable justification. Tackett v. State Farm Fire & Cas. Inc. Co., 653 A. 2d 254 (Del. 1995).

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

Yes, but only in the case of an insured prevailing against a property insurer.  Pierce v. Int’l Ins. Co. of Ill., 671, A.2d 1361, 1367 (Del. 1996).

Are Punitive Damages Recoverable in Insurer-Insured Dispute?

Punitive damages are recoverable for an intentional, egregious or malicious breach of an insurance contract. Tackett v. State Farm Fire & Cas. Inc. Co., 653 A. 2d 254 (Del. 1995)

An insured must establish that the insurer’s conduct was “outrageous,’ because of ‘evil motive’ or ‘reckless indifference to the rights of others…’ Mere inadvertence, mistake, or errors of judgment which constitute mere negligence will not suffice.” Tackett v. State Farm Fire & Cas. Inc. Co., 653 A. 2d 254 (Del. 1995).

Alternative Coverage Options

Declaratory relief is appropriate for the settlement of the question of liability of an insurance carrier, even though judgment has not been obtained against the party who asserts coverage. 10 Del.C. § 6501.  Monsanto c. v. Aetna Cas. And Sur. Co.,  565 A.2d 268, 275 (Del. Super. 1989).

Relevant Statutes

Declaratory Judgment – 10 Del. Code § 6501

“Courts of record within their respective jurisdictions have the 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. The declaration has the force and effect of a final judgment or decree.” 

Unfair Insurance Practices – 18 Del. Code §2301 et seq. and Unfair claim settlement practices  –  18 Del. Code §2304(16).

No private cause of action exists under statute prohibiting unfair insurance claim settlement practices. 18 Del. Code § 2304(16); Yardley v. U.S. Healthcare, Inc., 698 A.2d 979 (1996).

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