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West Virginia

What Is The Time for Responding to a Defense Tender?

Insurers must acknowledge  receipt of a claim within 15 working days, unless payment is made. W. Va. Code R. § 114-14-5.

Insurers must accept or deny a claim within 10 workings days of completing its investigation. W. Va. Code R. § 114-14-6-6.3.

Does Reserving Rights Create a Conflict of Interest?

If an attorney simultaneously represents the interests of both the insured and the insurance insurer, there is a substantial likelihood that the attorney’s representation of either party may in the future be materially limited. Barefield v. DPIC Companies, Inc., 600 S.E.2d 256, 269 (W.Va. 2004).

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?

No cases found.

What Actions May Result in a Claim for Bad Faith?

An insured can establish a private claim under the West Virginia Unfair Trade Practices Act, if it can prove an insurer engaged one of the following:  refusing to pay claims without conducting a reasonable investigation based upon all available information; not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear; or failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.  W.Va.Code § 33-11-4(9); Jenkins v. J.C. Penney Cas. Ins. Co., 280 S.E.2d 252 (W. Va. 1981), overruled on other grounds by State ex rel. State Farm Fire & Cas. Co. v. Madden, 451 S.E.2d 721 (W. Va. 1994).

West Virginia recognizes a common law bad faith claim if an insured “substantially prevails” in a suit against its insurer.  Hayseeds, Inc. v. State Farm Fire & Casualty, 352 S.E.2d 73, 80 (W. Va. 1986).

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

Where an insurer, without valid justification, refuses to defend its insured, the insured may recover from the insurer litigation expenses, including the costs of reasonable attorney’s fees. Marshall v. Fair, 416 S.E.2d 67, 72 (W. Va. 1992).

As to statutory claims, a prevailing plaintiff may recover the increased costs and expenses, including increased attorney fees, resulting from an insurer’s use of an unfair business practice and settlement or failure to settle the underlying claim. McCormick v. Allstate Ins. Co., 416 S.E.2d 67, 515 (W. Va. 1996).

In losing a common law bad faith claim, an insurer is liable for: (1) the insured’s reasonable attorneys’ fees in vindicating its claim; (2) the insured’s damages for net economic loss caused by the delay in settlement, and damages for aggravation and inconvenience. Hayseeds, Inc. v. State Farm Fire & Casualty, 352 S.E.2d 73, 80 (W. Va. 1986).

Are Punitive Damages Recoverable in Insurer-Insured Dispute?

Punitive damages are available for both statutory and common law claims if an insured can establish “actual malice.” See McCormick v. Allstate Ins. Co., 505 S.E.2d 454, 458-59 (W. Va. 1998).

Alternative Coverage Options

An insurer may recover its attorney’s fees for successfully prosecuting an action for declaratory relief against its insured where insured acted in bad faith. Ohio Farmers Insurance Company v. McKean, 76 F.Supp.2d 714, 716 (S.D. W.Va. 1999).

Relevant Statutes

Declaratory Judgment – W. Va. Code §

“Courts of record within their respective jurisdictions shall have power to declare rights, statue, and other legal relations, wither 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.”

West Virginia Unfair Trade Practices Act – W.Va. Code § 33-11-1 et seq.

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