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AIC Litigation & Legal Proceedings Flashcards

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  1. What is the primary role of a coverage counsel in complex insurance litigation?

    Answer: To provide legal opinions on whether a policy covers a particular claim or loss

    Coverage counsel analyzes policy language, endorsements, and applicable law to advise the insurer on whether coverage exists for a disputed claim.

  2. In litigation, what is the significance of the 'four corners rule' for an insurer's duty to defend?

    Answer: It requires the insurer to look only at the policy and the complaint to determine if a defense duty exists

    Under the four corners rule, the duty to defend is determined solely by comparing the allegations in the complaint against the policy's coverage terms.

  3. What is a 'declaratory judgment action' in insurance?

    Answer: A lawsuit filed to obtain a court ruling on whether a policy covers a particular claim

    A declaratory judgment action allows an insurer or insured to ask a court to interpret the policy and declare the rights and obligations of the parties.

  4. What does 'apportionment of fault' determine in a multi-defendant liability claim?

    Answer: The percentage of liability assigned to each defendant contributing to a loss

    Apportionment of fault assigns a percentage of responsibility to each party whose negligence contributed to the loss, affecting each defendant's financial exposure.

  5. What is a 'Stowers demand' in Texas insurance litigation?

    Answer: A settlement demand within policy limits that triggers the insurer's duty to accept or risk excess liability

    A Stowers demand requires the insurer to accept a settlement within policy limits when a reasonable insurer would do so, or face liability for any excess judgment.

  6. What is the purpose of an 'interpleader' action in an insurance claim?

    Answer: To allow the insurer to deposit policy proceeds with the court when multiple parties claim the same funds

    Interpleader allows the insurer to avoid multiple liability by depositing disputed funds with the court and letting the competing claimants litigate their rights.

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