Insurance Defense and Coverage
Bad Faith and Extracontractual
A time-limited demand response is the written reply an insurer must produce before a demand expires. An adequate response either accepts the demand, accepts with a request to clarify ambiguous terms, or explains what additional information is required and why, along with a request for reasonable extension.
Silence, or a response that arrives after expiration, is the fact pattern in a large share of excess verdicts and bad faith judgments.
Alternative Names:
Demand Response Protocol, Policy Limits Demand Response
Why it Matters?
This is the highest-consequence deadline in insurance defense practice. Defense counsel typically receive the demand, and their prompt evaluation, communication of exposure to the carrier, and written advice to the insured form the record that a later bad faith jury will examine. The obligation runs regardless of whether liability investigation is complete.
Frequently Confused with
Related terms
Frequently asked questions
What should a response include if the investigation is incomplete?
Who is responsible for responding, counsel or the carrier?
