Most California authorities say that the “implied covenant of good faith and fair dealing” obligates the insurer to investigate, process, and evaluate the insured’s claim promptly, thoroughly, and fairly.1 The seminal case describes bad faith as insurer conduct that impairs the insured’s right to receive the benefits for which they contracted.2 My favorite line from case law describes bad faith as an “imprecise label for what is essentially some kind of unreasonable insurer conduct[.]”3
Continue Reading Did the Insurance Company Commit Bad Faith?

We are happy to share with the insurance world a very positive development on COVID-19 Business Interruption cases – from Orange County, a conservative jurisdiction. The credit for this victory goes to our friends at Covington & Burling LLP, who we have been working closely with to advance justice for policyholders. A special shout-out is owed to Rani Gupta, Joan Li, David Goodwin, and Jad Khazem for this win, as the specific allegations of physical alteration were the driving force behind the victory and are instructive for future success.
Continue Reading Court Rules in Favor of Goodwill on COVID-19 Business Interruption Matter

One of the most painful decisions I have to make as an attorney in private practice is turning away potential clients because the cost of litigation dwarfs the value of their claim. I am certain that the public adjusters I know experience the same pain. But it is inevitable in the private sector, at least in states that lack consumer-friendly automatic attorney-fee laws, like California, where I practice. But no matter where you are, the number of mistreated policyholders vastly exceeds the caseload capacity of capable bad faith attorneys and public adjusters. I try to at least offer helpful tips to those I can’t formally represent, but I know that is often not enough.
Continue Reading Just Because You Can’t Get a Lawyer or Public Adjuster Does Not Mean You Are Out of Options

Last week I stumbled across an interesting policy provision thanks to a phone call from another veteran policyholder attorney. The policy provision came in the form of an endorsement that turns a broad form homeowners policy into a Difference in Conditions (“DIC”) policy. The endorsement essentially states that in exchange for a premium credit, the policy excludes coverage for any loss that could be insured under the California FAIR Plan.
Continue Reading California Warning: Some Difference in Conditions Policies Are Misleading Consumers

Businesses forced closed by COVID-19 and denied coverage by their insurers received a legal boost this month. In a recent North Carolina ruling, the court held that a commonly worded business interruption policy covered losses arising from closures mandated by COVID-19.
Continue Reading Court Finds Coverage for Restaurants’ COVID-19 Business Interruption Claims

While many enjoy “smokey” notes in their wine, no one enjoys the flavor of an ashtray. But that is exactly what can occur to wine made with smoke-tainted grapes. Wildfires produce an excessive amount of smoke combustion byproducts, and currently many of the wildfires raging now are in wine country. Because wildfire season lines up with winery harvest season, smoke-tainted grapes are an unfortunate reality – especially this wildfire season.
Continue Reading When Wine Grapes and Wildfire Smoke Meet: The Smoke Taint Claim

In California, the combination of both a covered loss and an uncovered loss can still be covered under the Efficient Proximate Cause Doctrine provided that the covered loss is the efficient proximate cause of the loss. California Courts have interpreted California Insurance Code sections 530 and 532 to codify the efficient proximate cause doctrine.
Continue Reading A Primer on the Efficient Proximate Cause Doctrine in California

Right now, more than 367 fires are burning in California. Many are 0% contained due to rugged terrain and high winds, and hundreds of structures have already been lost. Thousands more are threatened. Cal Fire is stretched thin and has called in resources from out of state. Many of the current fires resulted from thousands of lightning strikes from a coastal pressure storm. The lightning struck areas with extremely dry conditions. An historical heat wave is worsening the problem.
Continue Reading California Wildfires: What Can You Do Right Now to Protect Your Rights

The standard commercial lease for an entire building will require the tenant to either buy building insurance or reimburse the landlord’s premium payments if the landlord buys the insurance. If the tenant opts to purchase the building insurance, this often results in a lower overall premium to the tenant since the building coverage is underwritten with the tenant’s other insurance needs, such as business interruption insurance, workers compensation, liability insurance, and business personal property coverage. This begs a legal question—can a tenant can have an insurable interest in property it leases, i.e., the landlord’s building?
Continue Reading Does a Tenant Have an Insurable Interest in a Leased Building? Yes