From April 2 to 4, experts in claims and litigation management will gather in San Francisco for the 2024 CLM Annual Conference to discuss the latest trends in the space and share their insights.

Topics will include everything from AI to managing attorney-client relationships to battling the rise of nuclear verdicts.

On Wednesday afternoon, JD Keister, an attorney with McAngus, Goudelock & Courie LLC, will discuss challenges associated with time-limit demands and what claims professionals can do to overcome them.

He will be joined by Samara Landis, corporate claims manager with Selective Insurance Company of America; Jessica Tyndall, managing counsel with Nationwide; and Laura Zaroski, managing director, law firms practice at Gallagher.

Time-limit demands — pre-tort demands for settlement within a defined time frame and within policy limits — can create extra-contractual risk for insurers.

The deadline may be short, or the demands unreasonable or purposefully vague, setting carriers up for bad faith claims from insureds if they reject the offer or fail to fulfill the terms completely or on time.

These demands also create potential malpractice exposure for lawyers, especially if carriers take a hands-off approach and essentially outsource their response to law firms.

“The professional liability risk for attorneys is that many carriers are asking panel firms to respond to time-limit demands. In some states, this is fairly simple to do. In other states, courts are requiring mirror-image acceptances to the demand. These demands are coming with literally dozens of small and seemingly insignificant details that have to be complied with. A small failure by the firm to comply with a seemingly immaterial term may open the firm to a claim. We have seen some LPL carriers specifically request information on the firm’s work on time-limit demands when underwriting the risk,” Keister said.

Speakers will also discuss legislative trends that may help to reduce the exposure.

Some states have attempted to rein in these demands, including allowing an insurer at least 30 days to respond and requiring that the demand meets certain terms such as releasing all insureds from both present and future liability and providing evidence to support its claims.

But more work remains to be done.

“In most states, the trend is a poor one for the industry. A few states have enacted reform or have had positive case law. We are aware of pending legislative efforts to curtail some of the nuclear results that the industry faces in certain jurisdictions,” Keister said.

“But in the vast majority of states, we have seen the practice become more prevalent and dangerous. It has become less of a true opportunity to resolve a case, which is really the original purpose of a time-limited demand, and more of a ‘gotcha’ moment that leads to dangerous results.”

Without much help from legislation, how should claims professionals and attorneys respond to these demands to satisfy the best interests of the client without opening themselves up to additional risk?

Speakers will outline best practices. First and foremost, Keister said, is not to ignore a time-limit demand, no matter how unreasonable it may seem.

“Take them all seriously, regardless of what state you are in. Have a clear process with backstops, workflows and deadlines,” he said.

Most importantly, clearly document any reasons why the firm or carrier is rejecting a demand.

“The reality is that we are often not going to pay full limits for very legitimate reasons. We may need more information or to clarify questions around damages or liability. Document why you are unable to accept the demand when appropriate to show the good faith reasons,” Keister said.

The challenge may also be complicated by a shortage of claims talent in the industry.

Responding appropriately to time-limit demands, which are designed to create pressure, is easier with the benefit of experience and deep knowledge of the claims process.

Keister and his colleagues will discuss all of these trends and more. The session “Tick, Tick … BOOM: The Rising Dangers of Time Limit Demands on Carriers and Law Firms” takes place on Wednesday, April 3, from 3:30 to 4:30 pm.

“As this is a rising issue in our industry that may affect carriers, policyholders and counsel, we want attendees to be up-to-date on the latest trends and recent case law in certain jurisdictions,” he said. “We are hoping to have great conversation about specific strategies and risk avoidance measures that carriers and their law firm partners have implemented to address these rising dangers.” &

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