Hunton Insurance Recovery Blog

The Georgia legislature recently amended O.C.G.A. § 9-11-67.1, the statute that sets forth requirements for pre-answer settlement demands in motor vehicle personal injury cases, to temper use of such pre-answer settlement demands to set up bad faith failure-to-settle claims against insurers. These pre-answer demands are known as Holt demands based on the Georgia Supreme Court case of S. Gen. Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274 (1992), which established that an insurer which fails to settle a claim for its insured—and is found to have done so negligently, fraudulently, or in bad faith—may be liable for damages in excess of the insurance policy limits.

In a recent Client Alert, Hunton insurance partner Geoffrey Fehling discusses the impact of the California appellate court decision Practice Fusion, Inc. v. Freedom Specialty Insurance Co., where the court denied coverage under a directors and officers liability policy for a software developer’s $118 million settlement with the US Department of Justice to resolve allegations that the company violated anti-kickback laws in designing and implementing sponsored alerts in electronic health records software.