The Nevada Supreme Court addressed the scope of an insurer’s duty to defend under the implied covenant of good faith and fair dealing in Allstate Insurance Co. v. Miller, 125 Nev. Adv. Op. No. 28 (July 30, 2009).
The opinion considered when an insurer has a duty to inform its insured about settlement opportunities.
The Court held that an insurer’s duty to defend includes a duty to "adequately inform the insured of settlement offers," including reasonable offers that exceed policy limits. An insured’s failure to so inform its insured can be used as a factor in bad faith claims. The failure to inform can also serve as a proximate cause of damages to the insured.
See the entire opinion here.
Steve is the Managing Shareholder of Steven J. Klearman & Associates, a civil litigation law firm located in Reno, Nevada. He practices primarily in the areas of civil litigation and injury law, and has authored one of the definitive guides to Nevada civil law that is widely used by Nevada judges and attorneys, his book entitled Elements of Nevada Legal Theories.