United States: Insurance Laws and Products

A recent Ninth Circuit opinion challenges the long-standing practice of title insurers terminating their obligations by simply paying policy limits, potentially exposing them to bad faith liability even when exercising contractual options. The case examines whether title insurance companies can prioritize their economic interests over their insureds' need for legal defense without facing extracontractual claims.

Commercial and residential construction projects expose property owners and general contractors to significant risks arising from personal injury, property damage and construction defect claims. Contract documents can help allocate those risks to the responsible parties, while insurance can protect against losses that cannot be avoided or fully transferred. Common risk management tools include contractual indemnity, prevailing-party attorneys’ fees provisions, insurance requirements and early alternative dispute resolution (ADR) clauses.

The Supreme Court of Ohio has issued a landmark decision reinforcing the finality of binding insurance appraisal awards, establishing that courts will only set aside such awards in exceptional circumstances involving fraud or manifest mistake. The ruling clarifies the stringent pleading requirements parties must meet when attempting to challenge completed appraisals, particularly when alleging newly discovered property damage. This decision has significant implications for how property insurance disputes ar