Insurance Coverage Disputes

Chicago Insurance Coverage Disputes Lawyers Fighting for the coverage rights of businesses and individuals

Businesses, professionals and other individuals pay for insurance coverage to protect their assets and gain valuable peace of mind. But unfortunately, insurance companies often use excuses, loopholes or exceptions to avoid paying legitimate claims. This can be a shock and a huge financial burden for the insured who assumed they were protected At the Clinton Law Firm, our insurance coverage disputes lawyers in Chicago have been effective advocates for policyholders in these situations for the last 20 years.

Holding insurance companies to their contractual obligations

The Clinton Law Firm’s Chicago insurance coverage disputes attorneys have handled many coverage cases against insurance companies on behalf of policyholders. Our experience includes various types of claims and insurance policies:

Property and casualty insurance
Professional liability insurance
Directors and Officers liability insurance
Liability insurance

Insurance companies may withhold or delay payment as a negotiating tool, especially when the insurer knows the insured is relying upon receiving payment to meet expenses. By having a Chicago commercial litigation attorney intercede, the insured can send a clear message that it understands its rights and will not settle for less than what it deserves.

Taking insurers to task for bad faith behavior

In some circumstances, an insured that has been improperly denied coverage may make a claim for bad faith failure to provide insurance coverage, pursuant to the Illinois Insurance Act, 215 ILCS ¶ 5/155. To deter insurers from behaving in this way, the act allows an insured to recover damages in addition to the amount of the insurance claim. To enforce their rights, it is important for companies and individuals who have a dispute with their insurance carriers to obtain competent representation quickly. The insurance coverage liability lawyers of the Clinton Law Firm carefully document instances of insurance company bad faith to hold those companies accountable for their refusal to pay or diligently investigate and process claims.

To have acted in bad faith, an insurer must do more than simply refuse to pay a claim. Emerson v. American Bankers Ins. Co., 585 N.E.2d 1315 (Ill. App. 5th Dist. 1992). The refusal must be accompanied by vexatious, unreasonable, or outrageous conduct. Id. An insurer has not acted in bad faith by refusing to settle a claim if a bona fide dispute about coverage exists. Butler v. Economy Fire & Cas. Co., 557 N.E.2d 1281 (Ill. App. 2nd Dist. 1990).

In Propitious, LLC, et al. v. Badger Mutual Insurance Company, et al., No. 18 CV 1405 (N.D. Ill. Feb. 7, 2019), the Court dismissed without prejudice a 215 ILCS ¶ 5/155 cause of action, stating that, "Although Connacht alleges that Society has not paid all it is owed under the policy, it fails to plead sufficient facts that show Society wrongfully and unreasonably refused to comply with its policy obligations." Rather, "the complaint reveals that Society participated in discussions to attempt to resolve the coverage dispute, investigated Connacht’s claim, including retaining a third-party adjuster to evaluate the damage to the audiovisual equipment, and made payments for those damages that it determined were covered under the policy in excess of $142,000" Id.

The following conduct by an insurer is likely to violate 215 ILCS ¶ 5/155:

The insurer knowingly misrepresents relevant facts or policy provisions. Emerson v. American Bankers Ins. Co., 585 N.E.2d 1315 (Ill. App. 5th Dist. 1992).
The insurer neglects to respond to or acknowledge communications from the insured. Employers Insurance of Wausau v. Ehico Liquidating Trust, 186 Il1.2d 127, 708 N.E.2d 1122, 237 Ill. Dec. 82 (1999).
The insurer fails to pay the amount it acknowledges is due. Millers Mutual Insurance Association of Illinois v. House, 286 lll.App.3d 378, 675 N.E.2d 1037, 221 Ill.Dec. 613 (5th Dist. 1997).
The insurer attempts to settle a claim for less than the claim is reasonably worth. Valdovinos v. Gallant Insurance Co., 314 ll1.App.3d 1018, 733 N.E.2d 886, 248 Ill.Dec. 211. (2d Dist. 2000).
The insurer fails to properly investigate a claim or bases a denial on improper investigative grounds. Smith v. Equitable Life Assurance Society of United States, 67 F.3d 611 (7th Cir. 1995).
The insurer fails to affirm or deny coverage within a reasonable amount of time of submission of the proof of loss form. Dickman v. Country Mutual Insurance Co., 120 11l.App.3d 470, 458 N.E.2d 199, 76 Ill.Dec. 60 (3d Dist. 1983).
The insurer fails to defend insured in an underlying action that potentially falls within the policy’s coverage. Bedoya v. Illinois Founders Insurance Co., 293 Ill.App.3d 668, 688 N.E.2d 757, 228 Ill.Dec. 59 (1st Dist. 1997).

On the other hand, a bona fide dispute will generally exist in the following circumstances:

The language of the insurance policy is ambiguous. Baxter International, Inc. v. American Guarantee & Liability Insurance Co., 369 Il1.App.3d 700, 861 N.E.2d 263, 308 lll.Dec. 198 (1st Dist. 2006).
There exists a factual dispute over the amount to be paid based on an estimate. Gaston v. Founders Insurance Co., 365 I11.App.3d 303, 847 N.E.2d 523, 301 Ill.Dec. 513 (1st Dist. 2006).
The insurer relies on Illinois case law to support its coverage position. Ragan v. Columbia Mutual Insurance Co., 291 I11.App.3d 1088, 684 N.E.2d 1108, 226 lll.Dec. 112 (5th Dist. 1997).

Even if an insurer’s coverage position is later found to be erroneous or unacceptable by a court, the dispute could still be bona-fide and that insurer could be found to have acted in good faith. Clayton v. Millers First Insurance Cos., 384 Ill.App.3d 429, 892 N.E.2d 613, 322 Ill. Dec. 976 (5th Dist. 2008). The insurer must at least have some factual or legal support for its defense.

Our attorneys fight for insurance policy holders in Illinois

The Chicago insurance coverage disputes attorneys of the Clinton Law Firm are not intimidated by big insurers. We have the legal knowledge, litigation experience and courtroom reputation to get results for our clients. To schedule a consultation and discuss your case with a knowledgeable Chicago business law attorney, call us at 312.357.1515 or contact us online today.

Some Basic Legal Concepts That You Should Consider

First, every dispute with an insurance company is a creature of the contract between the insured and the insurance company. The insurance policy is a contract. Under the terms of the policy, the insurance company agrees to insure against certain risks and, very importantly, excludes other risks. The Illinois Supreme Court defined “insurance” in this passage: