In general terms, it is not necessarily bad faith for a liability insurance carrier to terminate the defense of its insured following its payment of policy limits, when the insurance policy allows. In Hartford Fire Insurance Co. v. Peninsula Logistics, Inc., 2014 WL 1416339 *2 & n.1 (M.D. Fla. April 11, 2014)(Presnell, J.), the issue of whether the insurance contract allowed for termination of a defense upon payment of policy limits was held separate from the issue of whether the liability carrier terminated the defense in bad faith, and a declaratory relief action was allowed to proceed on the duty to defend issues whether or not a claim of bad faith could or would be filed.
© 2014 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.
Please Read The Disclaimer.