Time & Policy Limit Demands and Tenders

The firm’s dedicated practice team understands the specific duties of time and policy limit demands. The team employs best practices in navigating this environment and documenting all attempts to investigate and settle these demands.

“Tender Watch” Exposure – The Powell Doctrine

In Florida, an insurer must investigate the facts, give fair consideration to a settlement offer that is not unreasonable, and settle the claim, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. The “Powell Doctrine” can present traps for unwary insurers that await a formal demand. “Where liability is clear and injuries so serious that an excess judgment is likely, the insurer has a duty to initiate negotiations…” Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12 (Fla. 3d DCA 1991). This has been construed to mean an insurer may have a duty to tender its policy limits to a claimant where no demand has even been made.

The requirements of an insurer include (1) advise of all settlement opportunities, (2) advise as to the probable outcome of the litigation, (3) warn of the possibility of an excess judgment, (4) advise the insured of any steps he might take to avoid an excess judgment, (5) investigate the facts, (6) give fair consideration to a settlement offer that is not unreasonable under the facts and (7) settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. Florida’s standard jury instruction states that “an insurance company acts in bad faith in failing to settle a claim against its insured within its policy limits when…” “under all the circumstances, it could and should have done so…”“had it acted fairly and honestly toward its insured (or excess carrier) and with due regard for their interests.”

On losses that have exposure that could exceed or result in a “tender” of policy limits, we employ a “tender watch” strategy and protocol that involves timely investigation and interaction with claimant and their counsel to document and execute the 7 requirements above. The team will interact with the insured and claimant’s counsel and document all attempts to investigate and evaluate issues of liability, causation and damages so that the carrier and its insured can have substantive strategy discussions to allows the carrier to make calculated decisions prior to the receipt of a demand.

Tender of Policy Limits – The Mirror Image Rule 

A decision to tender policy limits on a claim is governed by contract law. It is of paramount importance that a strategy be developed and executed flawlessly to increase the likelihood of acceptance. Our dedicated team will scrutinize all aspects of plaintiff’s demands and pre-demand communications and develop a strategy to effectuate a successful tender of policy limits should that be the desired goal of the insurer and its insured. There are a number of common tender mistakes, also known as “bad faith” setups, such as alleged violations of the ‘mirror image’ rule, release language, conditions on tenders, statutory compliance with insurance disclosures, requests for financial and other information from insureds (Harvey Doctrine), decisions affecting the release of additional insureds (the Contreras Doctrine, etc.) Our team will identify and avoid these traps so as to avoid a rejection when a decision has been made to tender policy limits.

Global Mediations – The Farinas Doctrine

Multiple claimant, single limit, no excess time and policy limits demands present their own unique challenges in a state that does not allow interpleader for these types of claims. The most common and most difficult bad faith set up to navigate involve multiple claimants out of the same incident, particularly in a single limit, no excess insurance scenario. The Farinas v. Florida Farm Bureau doctrine requires an insurer to investigate and settle as many claims as it can within policy limits. There is no safe harbor other than to document and execute a strategy that increases the chances of a successful tender, especially when many times the competing plaintiffs’ do not want to compromise claims because they exceed all available insurance coverage for the loss. Our team employs a proprietary strategy to resolve these claims without the need for litigation.

The decision in Aldanas serves as a sobering reminder to insurers of the importance of having a tender protocol and strategy in place and executing it flawlessly once a decision to tender policy limits has been made. A mere checklist is not enough. You must meticulously document your strategy calls with your insured, the risk and options and ultimate decision-making process using a multi-disciplinary and decision-tree approach because every loss presents its own unique set of circumstances and challenges.

TLD/PLD Pre-suit Mediations

When it comes to third party bad faith and extra-contractual obligations, there is no safe harbor to navigating the demand. We will help develop your investigation and document all attempts to resolve these matters early and efficiently. We regularly initiate pre-suit Zoom mediations on Time Limit and Policy Limit Demands and our experience and resources to attack medical providers and over billing gives us the ability to obtain excellent results for our clients and their insurers without the need to litigate and exhaust any discovery. We will obtain critical medical records, collateral sources, expose billing fraud, interview plaintiffs, obtain informal expert opinions on imaging quickly and mediate your case within 30 days of assignment.

For assistance, Contact Daniel Santaniello.

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