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Vol. 5, Iss. 7
June 22, 2016

Doug Widin, Reed Smith, LLP –
Representing Policyholders After 20 Years On The Other Side

Doug Widin spent two decades representing insurers in coverage disputes. Then, in 2005, in a New York minute, everything changed. He joined Reed Smith’s Philadelphia office, doing the same type of work, but now representing policyholders. You don’t often see a lawyer in our field make such a sharp pivot – especially after that many years. Doug was kind enough to tell his unique story in The Four Questions column.

Doug has 30 years of experience in commercial litigation, with a concentration in insurance coverage litigation and counseling. He has handled matters for clients’ class actions, securities, real estate and contract disputes. His insurance litigation and counseling spans all aspects of property insurance, including cause and origin, valuation, business interruption, contingent business interruption and codependency, valuable papers and records, and sue and labor claims, under the full spectrum of standardized and manuscript policies. He has also represented clients extensively with regard to liability policies, including commercial general liability policies, professional error and omissions policies, directors and officers insurance, and numerous specialty liability insurance coverages.

What made you switch from representing insurers for so many years to the policyholder side?

The spate of coverage litigation following the Y2K debacle wound up with very few policyholder victories. I was representing carriers then and won several cases where policyholders missed the pressure points and arguments that could have at least achieved a good settlement. Commercial litigators took these cases thinking they were just ordinary contract cases. By the time they started to catch on, the cases were over. That’s when I decided there was room for a knowledgeable P&C coverage lawyer representing carriers to switch sides and avoid the increasing push toward commoditization of carrier side work. Of course the market has gotten pretty crowded on the policyholder side since then, but it’s been and remains a good ride.

Can you compare and contrast working on the two sides of the aisle?

The two sides are naturally very similar in terms of the subject matter. The policyholder side more frequently involves taking the initiative and pushing to keep the claim moving. The policyholder side also involves much more client education and expectation management, since these clients often have no previous experience with denied or litigated claims. Ironically, it seems that insurers and their lawyers are the ones who take claims much more personally and are more ready to ascribe bad motives to their counterparts when they could easily be tarred with the same brush. They forget the best advertisement for an insurer is a professionally handled and perhaps even well-paid claim.

What are some things that insurers do in handling claims that (1) are irksome to policyholders and (2) open themselves up to exposure for bad faith?

Few things are more irritating and drive policyholders more crazy than starting off the claim receiving a Bible-thick reservation of rights letter that does nothing more than spew lengthy excerpts of policy language, much of which has no discernible relationship to the claim at hand, and ends with “for these and other as yet to be conjured reasons Insurer reserves its rights to deny your claim.” These letters never actually contain any reasoning, but are just exercises in rump covering that signal the claim will be a long, arduous process. When the coverage door gets slammed in its face, the policyholder at least wants and deserves to be told the real reasons why. Also, don’t invent post hoc underwriting reasons why the claim isn’t covered. No one ever thought about this claim beforehand. There will be nothing to support it, so it will only make the insurer look bad later. Finally, if you make a mistake, admit it. Honest mistakes, almost universally, are not grist for a bad faith claim, but mistakes that are recognized, yet continued and compounded, are wonderful fodder for bad faith claims. When an insurer makes a mistake, it should admit it and own it. Then, pay the claim and live to fight another day.

Does your prior life representing property and casualty insurers in coverage claims affect how you approach claims for policyholders?

I think representing property and casualty insurers for a substantial period of time gave me insight into and appreciation for the frames of reference of insurers, claim representatives, and their lawyers that I don’t see evidenced by many policyholder lawyers. It helps me avoid unnecessarily tweaking the other side’s nose or inadvertently escalating an issue. This benefits my clients, because the road to resolution is less cluttered with distractions and I can help the other side package an acceptable resolution. It’s easier to get your adversary to swallow a pill that isn’t bitter. Many times a quicker resolution that is not a 100 percent victory or vindication is still much more useful to the client than a fully litigated win, at substantial cost, two years in the future.

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