“For insurance companies, a critical aspect of [the transition to remote working] is the timely delivery of mail to claims professionals,” partner Michael E. Longo writes in Law360. “While many claims are now reported electronically, time-limited settlement demand letters are often sent by postal mail. After all, when attempting to set the carrier up for extracontractual exposure, the claimant’s goal is for the carrier to fail to timely respond to the demand.”
In his article, Mike identifies the risks of bad-faith setups for insurers that are likely to result from the transition to remote working occasioned by the COVID-19 pandemic, and also addresses legal precedent that may come into play in the defense of COVID-19-related bad-faith claims.
“In short, carriers should be prepared for an uptick in time-limited settlement demands during the COVID-19 pandemic. In response, carriers should ensure that despite any distractions or difficulties caused by the transition to a remote workplace, incoming mail is timely forwarded to the handling claims professional,” Mike writes. “Claims professionals should promptly review incoming mail and scrutinize the contents for time-limited demand language. In this way, carriers can continue to protect the interests of their insureds and minimize their own exposure to extra-contractual liability.”
“Insurers Working Remotely Should Beware Bad Faith Setups,” Law360, April 7, 2020 (login required)
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