Handling Short-Fuse Policy Limit Settlement Demands

The holidays—parties, family and the spirit of giving.

Some personal injury plaintiff attorneys really get into the spirit, hoping to receive the gift of ‘open’ policy limits and unlimited injury recoveries by making short-fused settlement demands that are set to expire right before, during or right after the holiday.

Timing settlement demands for holidays (and the press of business and short staffing that surrounds the holidays) increases the risk for slip-ups in the claims handling process, which could potentially lead to significant or even catastrophic financial consequences for liability insurers.

As one exasperated pair of defense attorneys put it: ‘the original purpose of ‘bad faith’ laws has become perverted, leaving a system in which a minor error, miscommunication, or misunderstanding leads to a finding of bad faith.

Sometimes that ‘error’ is due to the deliberate conduct of the plaintiff’s attorney, who claims he or she is merely doing what is in the best interests of his or her client.’