What Is The Time for Responding to a Defense Tender?
An insurer must acknowledge receipt of a claim within 15 days of receipt. Neb. Admin. R. & Regs. Tit. 210, Ch. 61, § 006.
An insurer must accept or deny coverage within 15 days of receipt of proof of loss. Neb. Admin. R. & Regs. Tit. 210, Ch. 61, § 008.
Does Reserving Rights Create a Conflict of Interest?
Nebraska courts have no so recognized.
Does a Reservation of Rights Create Additional Duties?
No cases found.
What Must Be Done If A Conflict of Interest Exists?
Once an insured as reserved its rights, the insured may either accept the defense under the reservation or reject it and assume the defense. First United Bank of Bellevue v. First Am. Title Ins. Co., 496 N.W.2d 474, 481 (Neb. 1993).
Who Is Responsible for Fees of Independent Counsel?
Unclear under current Nebraska law.
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?
A common law claim for the bad faith denial of coverage is available; to establish it, an insured must prove (1) the absence of a reasonable basis for denial of coverage, and (2) the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. LeRette v. American Medical Sec., Inc., 705 N.W.2d 41, 43 (Neb. 2005).
Nebraska also recognizes a claim for the bad faith refusal to settle a third-party claim. Olson v. Union Fire Ins. Co., 118 N.W.2d 318, 320-321 (Neb. 1962).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
Attorney fees are recoverable. See Neb. Rev. Stat. § 44-359.
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
Punitive damages are not recoverable. See Abel v. Conover, 104 N.W.2d 684, 690 (Neb. 1960).
Alternative Coverage Options
An insurer may file a declaratory judgment petition seeking a determination as to whether an insured’s conduct or a specific event is excluded from coverage under a policy of insurance. American Family Ins. Co. v. Hadley, 648 N.W.2d 769, 776 (Neb. 2002).
An insurer was not allowed to intervene in the tort action against its policyholder for the purpose of posing special questions to the jury to allow an allocation of damages between covered and non-covered claims. High Plains Cooperative Association v. Mel Jarvis Construction Company, 137 F.R.D. 285, 289 (D. Neb. 1991).
Relevant Statutes
Declaratory Judgment – Neb. Rev. Stat. § 25-21.
“Courts of record within their respective jurisdictions shall have 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, and such declarations shall have the force and effect of a final judgment or decree.”
Unfair Insurance Trade Practices Act – Neb. Rev. Stat. § 44-1501 et. seq. offers no private cause of action. Allied Fin. Servs., Inc., v. Foremost Ins. Co., 418 F. Supp. 157, 162 (D. Neb. 1976).