Hunton Insurance Recovery Blog

Last week, in Golden Bear Insurance Company v. 34th S&S, LLC, a Texas federal court held that an insurer had no duty to cover a personal injury judgment in excess of the $1 million policy limit. The holding reminds parties in Texas to carefully consider the most basic—and sometimes very particular—requirements surrounding Stowers demands.

Timely notice is an important first step in a successful insurance recovery.  But insurance policies are not always straightforward in identifying how, when, and to whom notice must be provided.  Some states may also impose additional procedural hurdles, including requiring policyholders to contact their insurers before filing suit (the idea behind this requirement is that it may avoid litigation).  Failing to comply with pre-suit requirements can hurt the policyholder’s recovery, as illustrated in a recent decision from the Northern District of Texas. 

The Fifth Circuit recently reaffirmed that an insurer’s duty to indemnify hinges on the facts determined in the underlying case, not the allegations. Thus, as confirmed by the Fifth Circuit’s July 31, 2023 decision in Liberty Mut. Fire Ins. Co. v. Copart of Conn., Inc., No. 21-10938, 2023 WL 4862793 (5th Cir. July 31, 2023), an adverse duty-to-defend decision may not foreclose a liability insurer’s indemnity obligations.

In two cases decided June 28, 2019, the Texas Supreme Court held that an insurer’s invocation of a contractual appraisal provision after denying a claim does not as a matter of law insulate it from liability under the Texas Prompt Payment of Claims Act (“TPPCA”). But, on the other hand, the court also held that the insurer’s payment of the appraisal award does not as a matter of law establish its liability under the policy for purposes of TPPCA damages.