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Insurance Services – Coverage & Bad Faith Litigation

Marshall Dennehey's Insurance Coverage/Bad Faith Litigation Practice provides full-service insurance litigation solutions for national and global insurance carriers. Far beyond coverage and bad faith litigation counsel, our Insurance Services practice has developed a full suite of innovative services designed to meet the needs of our insurance carrier clients.

From Florida to New York, we use creative strategies to effectively control exposure, avoid litigation and transfer risk, while protecting our clients' brands and industry position. Our legal services include counsel and defense of issues arising from commercial, personal, and specialty property and casualty policies, professional liability policies, health/life policies and workers' compensation policies.

The Insurance Services Practice is led by Todd Leon, as the northeast head, and Michael Packer, shareholder in our Fort Lauderdale office, overseeing the south. While the group’s 20 attorneys provide continuity in legal services across the board, Mike and the southeast team have a keen understanding of the unique coverage issues inherent to the state of Florida. Supported by a network of outstanding associates, paralegals and support staff, we are adept at helping clients navigate all aspects of the most complex coverage disputes, first-party property and automobile litigation.

We have successfully represented and defended insurance companies in first-party and bad faith litigation in both state and Federal courts. We are experienced in issues concerning institutional discovery, corporate designee/apex/employee depositions and the tactics utilized by plaintiffs to leverage settlements. By providing strategic advice both before and during litigation, we assist clients in analyzing available coverage and minimizing future risk. When it is in the client's best interests to proceed to trial, our experienced trial attorneys are prepared to rigorously defend the most complex insurance coverage and bad faith cases.

Our services include:

  • Coverage Consultation
  • Third-Party Coverage/Litigation Services
  • First-Party Property Coverage/Litigation Services
  • First-Party Automobile Coverage/Litigation Services
  • Bad Faith Litigation Services
  • SIU/Fraud Coverage/Investigation/Litigation Services
  • Indemnification Risk Transfer Strategies
  • Coordinating Counsel Services
  • CAT Operation Coverage Strategies
  • Bad Faith Strategic Evaluation
  • Policy Language Review
  • Administrative/Insurance Department Representation and Strategies
  • Claims Practices Consultation and Services
  • Institutional Discovery Consultation and Services
  • Development of Guidelines and Best Claims Practices Strategies
  • Training and Educational Development from commercial, personal and specialty property and casualty policies, professional liability policies, health/life policies and workers' compensation policies

The Insurance Services Practice serves clients from our 19 offices located throughout Pennsylvania, New Jersey, New York, Delaware, Florida, Ohio and Connecticut, and in neighboring jurisdictions in Maryland, West Virginia and Kentucky.

Results

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Defense Verdict Received in an Insurance Exclusionary Clause Dispute

We received a defense verdict after bench trial in an insurance exclusionary clause dispute. The plaintiff’s personal property in a storage unit was damaged when a municipal water main broke outside the storage facility. The claims representative offered the full policy limits before trial. However, the plaintiff sought recovery of the full claim amount for her damaged property. We argued that her recovery was specifically excluded by the water damage exclusion provision within her insurance policy. The judge agreed and concluded that the water main was part of a containment system for water and the exclusionary clause was applicable.

Achieved Dismissal of an Appeal of Our Defense Verdict

We won dismissal of the plaintiff’s appeal of a defense verdict. Our client issued a professional liability insurance policy to the plaintiffs. When the plaintiffs were sued for legal malpractice, they notified our client of the suit and asked them to provide counsel to defend the matter. However, the plaintiffs never agreed to counsel proposed by our client. The plaintiffs then proceeded to mediation in the legal malpractice action and settled the matter without notifying our client. As a result, our client denied the plaintiffs’ request for indemnification. The plaintiffs then brought suit against our client for breach of contract and bad faith, alleging they wrongly denied indemnification and failed to provide counsel. The matter went to jury trial from April 8–11, 2024, where we successfully defended our client as the jury returned a defense verdict. The plaintiffs filed post-trial motions and then appealed the decision to the Superior Court of Pennsylvania, arguing the trial court erred in allowing the jury to see a copy of the insurance contract during their deliberations. The Superior Court dismissed the appeal and found that the plaintiffs waived their argument by failing to cite relevant legal authority in their appellate brief. The Superior Court also stated in a footnote that, should the court have reached the issue on appeal, it would have found it meritless because the insurance contract was a central piece of evidence to which the plaintiffs did not object during trial.

Thought Leadership

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Defense Digest

On the Pulse… Profile of the Insurance Services – Coverage and Bad Faith Litigation Practice Group

June 30, 2026

The Insurance Services – Coverage and Bad Faith Litigation Practice Group delivers comprehensive, end-to-end litigation and advisory services to national and global insurance carriers. While the group is deeply experienced in coverage and bad faith litigation, its capabilities extend well beyond traditional legal defense. Through its broader Insurance Services practice, the firm has built a dynamic suite of innovative, client-focused solutions tailored to the evolving needs of insurers operating in complex and high-risk environments. With attorneys present in jurisdictions spanning from Florida to New York, the practice group approaches each matter with a strategic, solutions-oriented mindset. Its attorneys focus not only on resolving disputes, but on proactively managing risk by developing creative strategies to control exposure, avoid litigation where possible, and transfer risk effectively. In doing so, the group remains mindful of the broader business implications for its clients, including the protection of brand integrity and competitive positioning within the insurance industry. The group’s experience encompasses the full spectrum of insurance products, including commercial, personal property, and casualty policies, professional liability coverage, health and life insurance, and workers’ compensation policies. This breadth allows the team to provide nuanced, industry-specific counsel across a wide array of coverage issues and claims scenarios. Leadership within the practice group reflects both geographic reach and subject-matter depth. Todd Leon, who has offices in Philadelphia and Mount Laurel, serves as the Northeast head, with Allison Krupp of the Camp Hill office serving as vice-chair. Michael Packer, based in Fort Lauderdale, oversees operations in the Southeast, with Danielle Robinson, also of Fort Lauderdale, as the vice chair. Together, they guide a team of approximately 20 attorneys who provide consistent, coordinated legal services across jurisdictions. The Southeast team, in particular, brings a sophisticated understanding of the unique legal and regulatory challenges associated with Florida’s insurance landscape. Across all offices, attorneys are supported by a strong network of associates, paralegals, and professional staff, enabling the group to efficiently manage even the most complex coverage disputes, including first-party property and automobile litigation. The group also benefits from the leadership and insights of Jim Cole, the former group chair, who is now the Director of the firm’s Professional Liability Department. The practice group has a proven track record of successfully representing insurers in both state and federal courts in first-party and bad faith litigation and in providing opinions on coverage issues in jurisdictions around the country. Its attorneys are well-versed in the intricacies of institutional discovery, including corporate designee, apex, and employee depositions, as well as the litigation tactics often employed by plaintiffs to drive settlement pressure. By offering strategic guidance at every stage – both pre-litigation and during active disputes – the group helps clients evaluate coverage positions, mitigate risk, and make informed decisions about resolution or trial. When litigation is unavoidable, the firm’s seasoned trial attorneys are prepared to vigorously defend even the most complex and high-exposure matters. Beyond litigation, the group offers a wide array of services designed to support insurers’ operational and strategic objectives. These include coverage consultation, coordinating counsel services, catastrophe (CAT) operation coverage strategies, and specialized support for first-party property and automobile claims. The team also provides SIU and fraud-related investigation and litigation services, indemnification and risk transfer strategies, and comprehensive bad faith evaluation and defense. Additional offerings include policy language review, representation before administrative and insurance departments, claims practices consultation, and institutional discovery support. The group also works closely with clients to develop best practices, internal guidelines, and customized training and educational programs tailored to the full range of insurance products. With 19 offices across Pennsylvania, New Jersey, New York, Delaware, Florida, Ohio, and Connecticut, and an active presence in neighboring jurisdictions such as Maryland, West Virginia, and Kentucky, the Insurance Services Practice Group is positioned to provide seamless, regional, and national support. Its integrated approach ensures that clients receive not only skilled legal representation but also practical, forward-looking guidance designed to meet the demands of today’s insurance landscape.

Legal Updates for Coverage & Bad Faith

Coverage Determined, Judgment Paid, Bad Faith Survives: Fourth DCA’s Opinion Highlights the Distinction Between Contractual and Extra-Contractual Damages

June 24, 2026

In Healthy Food Experts, LLC v. Amguard Ins. Co., No. 4D2025-0181 (4th DCA June 10, 2026), the Fourth District Court of Appeal explained that an insurer’s payment of a judgment in a breach of contract case does not automatically eliminate a later bad faith claim seeking extra-contractual damages. The decision provides guidance on when a first-party bad faith claim may still proceed after a coverage dispute has already been resolved by a judgment. Healthy Food Experts, LLC involved a dispute related to a property damage claim submitted under a commercial insurance policy issued by the insurer following a ceiling collapse at the insured’s restaurant. The insurer denied coverage for the insured’s losses for business personal property and business income, but extended coverage for the food spoilage losses. As a result, the insured filed a breach of contract action and ultimately obtained a jury verdict. The insurer appealed the verdict and, while the appeal was pending, the insured filed a Civil Remedy Notice (CRN) seeking payment for the judgment plus interest. The insurer failed to cure the CRN within the statutory sixty-day cure period, but paid the judgement in full with accrued interest following the appeals court’s per curiam affirmance. Nevertheless, the insured filed a first party bad faith lawsuit claiming to have suffered extra-contractual damages. In response to the bad faith suit, the insurer filed a Motion to Dismiss for failure to state a cause of action, relying on Fridman v. Safeco Insurance Co. of Illinois, 185 So. 3d 1214 (Fla. 2016) stating that damages were fixed by judgment of the breach of contract suit and the insured could not recover additional damages beyond those already awarded. The insurer also argued that the judgment did not exceed the insured’s policy limits, which was a required element of a first party bad faith claim. The trial court dismissed the bad faith action based on Fridman, concluding the insured could not seek any additional damages.  The insured appealed the court’s ruling to the Fourth DCA arguing the trial court’s order conflicts with Florida law and misapplies Fridman, as a contractual damage determination in the underlying suit establishes the “condition precedent to prosecute a first party bad faith action.” Cingari v. First Protective Ins. Co., 377 So. 3d 1169, 1174 (Fla. 4th DCA 2024). Further, the insured argued that the only purpose to the binding language in Fridman is to prevent the re-litigating of the same damages, which in this case are the contractual damages. The insured asserted the damages were not the “same” as they were seeking consequential damages from the insurer’s alleged bad faith. The Fourth District emphasized in its ruling that a first party bad faith claim is not ripe for litigation until there has been the following: a determination of the insurer’s liability for coverage; a determination of the extent of the insured’s contractual damages, and the required civil remedy notice is filed pursuant to §624.155(3)(a).  Demase v. State Farm Fla. Ins. Co., 239 So. 3d 218, 221 (Fla. 5th DCA 2018) The court concluded that the necessary conditions were satisfied as the jury verdict determined both coverage and the extent of the insured’s contractual damages, and the insured properly filed a civil remedy notice, so the bad faith claim was ripe for litigation. The Fourth DCA further explained the insured could not seek contractual damages in its bad faith action, which was previously litigated in its breach of contract suit. However, the court determined the insured could seek “extra-contractual damages,” which were not recoverable in the insured’s breach of contract suit, which may include interest, court cost, and reasonable attorney’s fees incurred by the insured. Further, the court held excess judgment is not essential in a first party bad faith claim and the insurer’s late payment of the judgment did not preclude the insured’s bad faith action. As a result, the Fourth District Court of Appeals reversed the trial court’s final dismissal order of the bad faith action. This opinion highlights the distinction between contractual and extra-contractual damages. Moreover, this case demonstrates that a judgment does not necessarily end the dispute in a first party property claim as it is could also serve as a prerequisite of a bad faith action. The decision serves as a reminder that insurers may face bad faith exposure notwithstanding the payment of a judgment in an underlying breach of contract action.

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Firm Highlights

Thought Leadership

Vendor Cyber Attack Compromises PII of More Than 3 Million Hunting and Fishing License Holders in Texas

The Texas Parks & Wildlife Department (TPWD) announced earlier this month that one of its vendors which handles the sale of state hunting and fishing licenses was the victim of a cybersecurity attack. The threat actor appears to have exfiltrated personal driver’s license information, passport numbers, email addresses, phone numbers and addresses of over 3 million hunting and fishing license holders.  The State Parks Department advised that the attack did not compromise social security numbers, dates of birth or financial information. Texas Cyber Command, the state’s new cybersecurity authority formed to protect critical infrastructure and coordinate threat responses across state and local government, reportedly assisted in detecting and containing the attack. TPWD has already set up free credit monitoring for those impacted through Kroll.  According to press reports, no specific group has yet been identified as the perpetrator of the theft. TPWD also advised that business has not been interrupted and license sales were continuing. This incident once again demonstrates that cybersecurity is only as strong as the weakest link in the supply chain. Businesses must prioritize security across their own environments and those of their vendors and contractors as well.

Thought Leadership

The Enforceability of Online Arbitration Agreements Remains Unresolved in Pennsylvania, But the Pennsylvania Superior Court has Provided Substantive Guidance on the Issue

Key Points: The Pennsylvania Supreme Court confirms that an order compelling arbitration is not immediately appealable as collateral orders. The outcome of Chilutti II has generally left the substantive enforceability issues with browsewrap agreements unresolved in Pennsylvania. Until this issue is resolved by the Pennsylvania courts, companies operating in the Commonwealth should strive to ensure that their registration websites and/or application screens conspicuously present arbitration agreements in manners which ensure their users and consumers assent to the terms of the agreements by following the standards set forth in Chilutti I. Browsewrap agreements have been defined as agreements “‘in which a website offers terms that are disclosed only through a hyperlink and the user supposedly manifests assent to those terms simply by continuing to use the website,’ and typically do not require an electronic signature.” See, Cobb v. Tesla, Inc., 2026 WL 458470, at *1 n. 2 (Pa. Super. Feb. 18, 2026) (citation omitted). They are largely regarded as the “if you keep using this, you agree to everything buried in this link” terms embedded into almost every online agreement consumers and users sign before proceeding with purchases of goods and/or services. While consumers are generally aware of them, many almost never click on the link, nor read them in their entirety. This leaves many consumers and users ignorant of the terms and impact of such agreements. However, one’s ignorance of the otherwise neatly-tucked-away terms rarely renders them unenforceable. The issue of the enforceability of browsewrap agreements has been up for debate for some time in many jurisdictions, including Pennsylvania. Indeed, Pennsylvania had a brief grip on this issue for a period in time. Specifically, in 2023, an en banc Superior Court set forth heightened standards for companies to meet in order to secure assent and enforce browsewrap arbitration agreements. See Chilutti v. Uber Techs., Inc., 300 A.3d 430 (Pa.Super. 2023) (en banc) (“Chilutti I”) Chilutti I involved a husband and wife who sued Uber and its subsidiaries after the wife, a wheelchair bound passenger using Uber’s rideshare service, fell, struck her head, and lost consciousness due to her uber driver failing to provide a seatbelt and making an aggressive turn during the trip. The Chilutti’s filed a negligence lawsuit against Uber and its subsidiaries. In response, the defendants moved to compel arbitration, arguing that “the couple’s conduct on the company’s website and application — when they registered for the ridesharing service — signified that they agreed to be bound by the mandatory arbitration provision found in the hyperlinked terms and conditions.” The trial court granted the defendants’ petition and stayed the proceedings pending the results of arbitration, and the Chilutti’s appealed. On appeal, the Superior Court addressed two issues. First, it addressed the issue of whether it had jurisdiction to hear the appeal. A divided Superior Court determined that it did, with its basis for the holding being that the order from which the Chilutti’s appealed was a collateral order. Next, the Superior Court set out to address the merits of the Chilutti’s substantive claim. The Superior Court concluded that the parties lacked a valid agreement to arbitrate. Its rationale was that Uber’s website and application did not provide reasonably conspicuous notice of the terms to the Chiluttis. In reaching this decision, the en banc Superior Court held that browsewrap arbitration agreements are enforceable in Pennsylvania only if the registration website and application screens explicitly inform consumers that they are waiving the right to a jury trial, the registration process cannot be completed until the consumer is fully informed of this waiver, and, when the agreement is available via hyperlink, the waiver appears at the top of the first page of the terms in bold, capitalized text. Since the ruling, Pennsylvania courts have applied Chilutti I to determine if browsewrap agreements are enforceable.  For instance, the Allegheny County Court of Common Pleas invoked Chilutti I to reject an agreement that lacked an express jury-trial waiver on the assent screen.  See Miller v. Festival Fun Parks, LLC, 92 WDA 2025 (C.P. Alleg. Cnty. Mar. 24, 2025). Similarly, the Superior Court has held that notice which failed to explicitly state the consumer was waiving a jury-trial right did not “me[e]t the strict burden set forth by our en banc Court in Chilutti I.” Pierce v. FloatMe Corp., 348 A.3d 1077, 1088 (Pa. Super. 2025). While the issue of enforceability of browsewrap agreements appeared to have been resolved by Chilutti I, Pennsylvania courts’ grip on this issue has been slackened by the Pennsylvania Supreme Court’s January 21, 2026, opinion in Chilutti II. See Chilutti v. Uber Techs., Inc., 349 A.3d 826 (Pa. 2026) (“Chilutti II”). Therein, the Supreme Court did not address the merits of the Chiluttis’ substantive claim, but rather the issue of whether the Superior Court had appellate jurisdiction to immediately review the orders staying litigation pending arbitration. The Court ultimately vacated the en banc opinion on jurisdictional grounds, holding that the Superior Court did not have appellate jurisdiction because the trial court’s order from which the Chiluttis appealed did not qualify as a collateral order and, thus, the Superior Court erred in holding to the contrary and lacked jurisdiction to entertain the merits” of the Chiluttis’ substantive claim. As such, Chilutti II has rendered Chilutti I nonbinding, and the issue of enforceability of online arbitration agreements remains unresolved. However, in light of the fact the Supreme Court did not address or comment on the merits of the Chiluttis’ appeal, Chilutti I is still meaningful. Specifically, it provides guidance as to the standards a company should strive to meet to ensure they have obtained users’ assent so that they are able to enforce online arbitration agreements. Additionally, it may serve as persuasive authority in judges’ evaluations of petitions and/or motions to compel browsewrap arbitration agreements until this particular issue is properly put before our appellate courts. Keanna works in our Pittsburgh, PA office. She can be reached at (412) 803-1174 or KASeabrooks@MDWCG.com.

Casey Alan Coyle Joins Marshall Dennehey's PA Appellate Practice as a Shareholder in Harrisburg and Philadelphia

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Marshall Dennehey Expands Leading Pennsylvania Appellate Practice With Addition of Shareholder Casey Coyle

News

Veteran Trial Attorney Joseph M. Toddy Joins Marshall Dennehey’s Casualty Department in Philadelphia

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Result

Unanimous Verdict Obtained in a Medical Malpractice Matter in Bergen County, New Jersey

Congratulations to our 2026 Florida Super Lawyers & Rising Stars: Elizabeth Ferguson, A.C. Nash, Taylor Naughton, Sophia Philor, Amara Rodriguez

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Marshall Dennehey Announces 2026 Florida Super Lawyers & Florida Rising Stars

Thought Leadership

Featured Conversations... Key Takeaways from A.M. Best’s Webinar on the Misuse Defense in Product Liability Claims, Featuring Michael Salvati

Michael Salvati, shareholder in our Philadelphia office, was a panelist for the April A.M. Best webinar, “The Misuse Defense: Strategic Approaches to Defending Product Liability Claims for Insurers.” During the program, Michael and his fellow panelists offered practical, jurisdiction‑specific guidance on how misuse and failure‑to‑warn theories intersect in modern product liability litigation. Michael emphasized the unique challenges these claims present—particularly in states like Pennsylvania, where evidentiary rules diverge sharply from those applied in many other jurisdictions. Failure to Warn as the “Flip Side” of Misuse Salvati explained that failure‑to‑warn allegations often arise as a direct counter to a misuse defense. As he noted, “If our misuse defense is that the plaintiff didn't use a product properly or safely, then the failure to warn claim is that we didn't tell them how to use it properly.” He emphasized that these claims can stem from either the absence of warnings or criticisms of existing warnings, such as insufficient specificity or lack of clarity about risks. Pennsylvania’s Unique Evidentiary Landscape One of Salvati’s most notable points was the stark difference in how Pennsylvania treats evidence of compliance with industry standards. He highlighted that Pennsylvania is “one of the only states…where that evidence is not admissible” in strict liability cases. Manufacturers cannot rely on compliance with ANSI, UL, ISO, or even federal safety standards to defend the product against a strict liability claim—because the focus is solely on the product itself, not the manufacturer’s conduct. Salvati acknowledged the challenge this creates for defense counsel and clients who expect such compliance to carry weight. Understanding the Three Defect Theories Salvati also walked through the three primary defect theories recognized in many jurisdictions: - Design defect – a flaw in the product’s intended design - Manufacturing defect – a deviation affecting a specific unit - Failure to warn – inadequate instructions or warnings He noted that warnings claims are increasingly significant and sometimes stand alone when design or manufacturing theories are weak. As he put it, plaintiffs often default to warnings claims because “the default position seems to be, ‘If I got hurt, there must be something wrong.’” Warranties and State‑by‑State Variations Salvati addressed how breach‑of‑warranty claims fit into the broader framework, explaining that implied warranties—such as merchantability—often overlap with strict liability in Pennsylvania. He emphasized the importance of understanding local nuances, as warranty law and admissibility rules vary widely across states. Looking Ahead: The Growing Importance of Warnings In his closing remarks, Salvati stressed that warnings should never be treated as an afterthought in product liability defense. He observed that warnings‑only claims are becoming more common and urged manufacturers and insurers to continually evaluate the clarity and completeness of their instructions and warnings. His takeaway: “We should always be talking about what are the instructions that come with our products…to bolster a misuse defense.” Listen to the complete webinar here: https://www3.ambest.com/conferences/events/eventregister.aspx?event_id=WEB1074.