Insurance Recovery Litigation

Insurance recovery litigation is policyholder-side work to secure the coverage a business paid for when a carrier denies, delays, or underpays a claim. It begins with reading the policy and the facts of the loss together, and where the carrier will not pay what is owed it extends to coverage litigation, declaratory-judgment actions, and bad-faith claims. The objective is the full benefit of the insurance program.

Hart David Carson LLP represents policyholders, meaning the companies, funds, executives, and families that bought the coverage. We do not act for insurers. That orientation matters, because policy language, claim-handling practices, and reservation-of-rights letters read very differently from the insured's side of the table. A single partner stays accountable for the recovery from the first claim notice through trial or settlement.

Both sides of a company's program. On the third-party side, the directors-and-officers, professional-liability and general-liability policies that respond to claims against the insured, where the fight is usually over the duty to defend, a reservation of rights or an exclusion for prior acts or related claims. On the first-party side, property and business-interruption, cyber, and representations-and-warranties cover, where the fight is over the period of restoration, the proof of loss or the carrier's valuation. Many of these sit in towers with excess and umbrella layers and reinsurance behind them, and we handle the tower as one claim.

A claim that the carrier handled a valid claim unreasonably: a denial without investigation, a delay with no reason given, or a lowball offer meant to exhaust the insured. Many states recognize it as a tort with damages above the policy limits. Illinois does not for first-party claims; its remedy is Section 155 of the Insurance Code, which lets the court add attorney fees and a capped statutory amount when the delay or denial was vexatious and unreasonable. Illinois does hold a liability carrier that refuses a reasonable settlement within limits responsible for the excess judgment that follows. We plead bad faith where the governing law and the claim file support it, because it changes how the carrier values the case.

When the first of three letters arrives: a reservation of rights, a request for a sworn proof of loss or an examination under oath, or a denial. Each creates a record the carrier will rely on later, and each has a deadline attached, 60 days for the proof of loss under most property forms, the policy period itself under a claims-made policy. Counsel at that stage can tender the loss to every potentially responsive layer, reply to the reservation with the policy language that closes each reserved defense, and file a notice of circumstances before an expiring policy takes its coverage with it. Most claims that are paid voluntarily are paid because the file was built that way.

Many programs span jurisdictions, with US, London-market, and other international layers governed by different law and dispute-resolution forums. We coordinate recovery across those layers and, where a claim turns on local law or a foreign forum, work with locally admitted counsel so the policyholder's position is advanced consistently wherever the dispute is heard.