Insurance buyers expect that an insurance policy should provide protection from loss, not a fifteen round fight to the finish. More and more frequently, insurance companies have been eliminating the promise of protection through unfair claims handling, or by attempts to undo the insurance promise altogether through rescission. Indeed, one major insurance company reportedly has commenced 100 rescission attempts. No wonder policyholders feel as though a “standing eight count” is needed every time they need their insurance company to pay a significant claim.
Several areas of insurance have been hard-hit with increasingly restrictive claims-handling or rescission attempts. For example, some of the current fight can be divided into two “Rounds”: (Round One) D&O liability insurance; and (Round Two) general liability insurance for products liability. The insurance promise—that darling of the insurance sales force—has become more and more difficult to actually obtain.