Insurance Litigation
Overview
The Law Firm of Hutchison & Steffen has an established relationship with many major insurance companies and understands how to effectively report and work with insurance representatives when their insureds are facing litigation. The Firm’s attorneys have successfully represented the insureds of these companies in hundreds of challenging and varied cases. The scope of the The Firm’s representation includes general commercial liability, auto liability, premises liability, and professional malpractice defense. The The Firm’s attorneys also provide counsel to insurance companies in bad faith litigation.
To assign a new matter or discuss a coverage question with an insurance defense attorney at the Firm, call 702.385.2500 in Las Vegas or 775.853.8746 in Reno, or contact Hutchison & Steffen online. Prior results do not guarantee a similar outcome.
Understanding The Practice
What Is Insurance Litigation?
Insurance litigation, as Hutchison & Steffen practices it, is the defense of a liability claim on behalf of an insured, at the request of and in coordination with the insurer, together with the coverage and bad faith counsel the insurer needs when a claim raises questions about the policy itself. The Firm serves as insurance defense attorneys for the insureds of major carriers in general commercial liability, auto liability, premises liability, and professional malpractice cases, and as counsel to insurance companies in bad faith litigation. It does not represent policyholders suing their own insurer.
Nevada is a dual-representation state. When an insurer retains defense counsel for its insured, that counsel represents both the insurer and the insured, and the Nevada Supreme Court has recognized that tripartite relationship and the privilege that attaches to it. The arrangement works when defense counsel understands the carrier’s reporting and reserve requirements as well as the courtroom, and when counsel recognizes the moment a coverage question turns the relationship into a conflict that Nevada law requires the insurer to address.
Hutchison & Steffen is a full-service, AV-rated law firm serving Nevada and the Southwest. The Firm has practiced in the State since 1996 and has grown to nearly 60 attorneys. Co-founder John T. Steffen is among the attorneys who handle insurance defense matters, and the Firm defends insureds in the district courts of Clark and Washoe counties, in the United States District Court for the District of Nevada, and for claims arising in Las Vegas, Henderson, Summerlin, North Las Vegas, Reno, Sparks, Carson City, and statewide.
Three Nevada Supreme Court decisions shape how an insurer manages a claim once suit is filed. In Century Surety Co. v. Andrew, 134 Nev. 819 (2018), the court held that an insurer that breaches its duty to defend is liable for all consequential damages of that breach, including a judgment above the policy limits, even where the insurer acted in good faith. In State Farm Mutual Automobile Insurance Co. v. Hansen, 131 Nev. 743 (2015), the court held that an insurer must pay for independent counsel selected by the insured when a reservation of rights creates an actual conflict of interest, decided case by case rather than automatically. And in Nautilus Insurance Co. v. Access Medical, LLC, 137 Nev. Adv. Op. 10 (2021), the court held that an insurer that defends under a reservation of rights may recover its defense costs if a court later determines no duty to defend existed and the insurer expressly reserved that right.
Read together, those cases reward carriers that tender a defense promptly, reserve rights with precision, and litigate coverage in a declaratory relief action rather than by withholding a defense. The Firm structures its engagement around that sequence: accept the defense, identify the coverage question, and resolve it on a separate track while the liability case is defended on its merits.
Insurance defense overlaps with several of the Firm’s other practices. Professional negligence claims against physicians and other licensed professionals are handled with our Professional Liability Defense attorneys. Construction defect claims tendered under commercial general liability policies draw on Construction Law. Claims against cities, counties, and other public bodies are handled with Public Entity Law, and adverse verdicts are taken up by our Appellate Litigation practice.
How We Serve Insurers and Their Insureds
Insurance Defense Services
General Commercial Liability Defense
The Firm defends businesses insured under commercial general liability policies against bodily injury, property damage, and personal and advertising injury claims, from the initial tender through trial. That work includes early evaluation of liability and damages for the carrier, reporting on the schedule the carrier requires, and tendering to additional insureds and indemnitors where the contracts allow. Where the claim raises a coverage question, the Firm identifies it at the outset so the carrier can reserve rights while the defense proceeds.
Auto Liability Defense
Nevada requires minimum liability limits of $25,000 per person and $50,000 per accident for bodily injury and $20,000 for property damage under NRS 485.185, and a large share of auto litigation involves claims that exceed those limits. The Firm defends insured drivers and commercial fleets under Nevada’s modified comparative negligence rule in NRS 41.141, which bars recovery by a plaintiff whose fault exceeds that of the defendants, and evaluates time-limited demands within policy limits with the exposure described in Allstate Insurance Co. v. Miller in view.
Premises Liability Defense
Slip-and-fall, negligent security, and other premises claims against retailers, hotels, restaurants, property managers, and homeowners associations are defended with the standard the Nevada Supreme Court set in Foster v. Costco Wholesale Corp., 128 Nev. 773 (2012), under which the open and obvious nature of a hazard is a factor in comparative fault rather than an absolute bar. The Firm investigates notice, inspection and maintenance records, and video early, because those facts decide most premises cases at summary judgment or at mediation.
Professional Malpractice Defense
The Firm defends physicians, other health care providers, and licensed professionals in professional negligence actions under NRS Chapter 41A, which requires an affidavit from a qualified medical professional with the complaint under NRS 41A.071, caps noneconomic damages under NRS 41A.035 at $590,000 for causes of action accruing in 2026, and makes each defendant severally liable for its own percentage of fault under NRS 41A.045. Defense of the professional is coordinated with any parallel licensing board matter through the Firm’s Healthcare Professionals Advocacy practice.
Coverage Analysis & Declaratory Relief
When a claim raises a question about whether the policy responds, the Firm advises the carrier on the duty to defend, which under Nevada law is broader than the duty to indemnify and is triggered by any potential for coverage on the face of the complaint. The Firm drafts reservation of rights letters that preserve the carrier’s position, including the right to reimbursement recognized in Nautilus, and files declaratory relief actions under NRS Chapter 30 to resolve coverage on a separate track from the liability case.
Bad Faith & Extra-Contractual Counsel to Insurers
The Firm defends insurers against claims for breach of the implied covenant of good faith and fair dealing and for violation of Nevada’s Unfair Claims Settlement Practices Act, NRS 686A.310, which gives an insured a private right of action for damages. Under Guaranty National Insurance Co. v. Potter, 112 Nev. 199 (1996), bad faith requires an unreasonable denial or delay and the insurer’s knowledge that it had no reasonable basis for it, and NRS 42.005 removes the cap on punitive damages for an insurer found to have acted in bad faith. The Firm also advises carriers during claim handling on the settlement communications and documentation that prevent those claims from arising.
Knowing Where the Exposure Sits
Nevada Insurance Defense Rules and What They Mean in Practice
Most extra-contractual exposure in Nevada traces to a handful of rules about how a claim is defended, reserved, and settled. The table below identifies the rule, the authority, and the practical effect for the carrier and its insured.
| Issue | Nevada Rule | Practical Effect |
|---|---|---|
| Duty to defend | Broader than the duty to indemnify; triggered by any potential for coverage under the allegations of the complaint (United National Insurance Co. v. Frontier Insurance Co., 120 Nev. 678 (2004)) | Doubt is resolved in favor of defending; a refusal to defend that turns out to be wrong exposes the carrier under Century Surety |
| Breach of the duty to defend | Insurer is liable for all consequential damages of the breach, including an excess judgment, without a showing of bad faith (Century Surety Co. v. Andrew, 134 Nev. 819 (2018)) | Policy limits do not cap the exposure; defend under a reservation of rights rather than decline |
| Reservation of rights and independent counsel | A reservation does not create a conflict by itself, but where an actual conflict exists the insurer must pay the reasonable cost of counsel chosen by the insured (State Farm v. Hansen, 131 Nev. 743 (2015)) | Reservation letters are drafted to identify the coverage issue precisely so the conflict analysis can be made and documented |
| Reimbursement of defense costs | An insurer that defends under an express reservation may recover defense costs if a court finds no duty to defend existed (Nautilus Insurance Co. v. Access Medical, LLC, 137 Nev. Adv. Op. 10 (2021)) | The reservation letter must expressly reserve reimbursement, and the coverage question is resolved through declaratory relief |
| Settlement within limits | An insurer must inform its insured of reasonable settlement opportunities and act in good faith in evaluating demands within limits (Allstate Insurance Co. v. Miller, 125 Nev. 300 (2009)); a third-party claimant has no direct bad faith claim (Gunny v. Allstate Insurance Co., 108 Nev. 344 (1992)) | Time-limited demands are evaluated on the record, with the insured informed in writing, and the file documents the reasoning |
| Bad faith standard and exposure | Unreasonable conduct with knowledge of no reasonable basis (Guaranty National v. Potter, 112 Nev. 199 (1996)); private action under NRS 686A.310; punitive damages uncapped under NRS 42.005 for an insurer acting in bad faith | A disagreement over value is not bad faith, but the claim file and the documented reasoning are the evidence, so both are built with litigation in mind |
Getting Ahead of the Claim
When an Insurer or Insured Should Involve Defense Counsel
Defense counsel should be assigned as soon as a claim is tendered, not after suit is filed, because the decisions that create extra-contractual exposure in Nevada are made in the first weeks: whether to accept the defense, what to reserve, and how to respond to a demand within limits. An insurer that declines a defense on a close coverage question does so at its own risk after Century Surety, and an insured that answers a complaint alone has already conceded the timing advantage the carrier paid for.
Timing also drives the liability case. Nevada’s two-year limitations period for personal injury claims under NRS 11.190(4)(e) means many suits are filed near the deadline with evidence already stale. Surveillance video, incident reports, witness contact information, and vehicle data are preserved in the first weeks or lost, and the Firm sends preservation direction to the insured and the carrier at assignment.
This page is educational and is not legal advice. Coverage and bad faith outcomes depend on the policy language, the claim file, and the facts of the underlying case, and the Nevada Supreme Court continues to refine the rules summarized here. Hutchison & Steffen has defended the insureds of major carriers in hundreds of matters across Nevada, and its attorneys report and resolve claims in the manner carriers require. Prior results do not guarantee a similar outcome.
Common Questions
Frequently Asked Questions
What Does an Insurance Defense Attorney Do?
An insurance defense attorney represents a policyholder who has been sued, at the request of and in coordination with the insurer that issued the policy. The attorney evaluates liability and damages for the carrier, reports on the carrier’s schedule, conducts discovery, negotiates settlement within the policy limits where appropriate, and tries the case if it does not resolve. In Nevada, insurer-appointed counsel represents both the insurer and the insured, and the same firm often advises the insurer separately on coverage and bad faith questions.
Does an Insurer Have to Defend a Lawsuit in Nevada if Coverage Is Uncertain?
Usually, yes. The duty to defend in Nevada is broader than the duty to indemnify and is triggered whenever the allegations of the complaint show any potential for coverage, with doubts resolved in favor of the insured. Since Century Surety Co. v. Andrew in 2018, an insurer that wrongly refuses to defend is liable for all consequential damages of that refusal, including a judgment above the policy limits, even if it acted in good faith. The safer course is to defend under a reservation of rights and resolve coverage in a declaratory relief action.
What Is a Reservation of Rights in Nevada?
A reservation of rights is the insurer’s written notice that it will defend the insured while preserving its position that some or all of the claim may not be covered. Under State Farm v. Hansen, a reservation does not by itself entitle the insured to independent counsel, but where the reserved issue creates an actual conflict between the insurer and the insured, the insurer must pay the reasonable cost of counsel the insured selects. Under Nautilus v. Access Medical, a reservation that expressly preserves reimbursement allows the insurer to recover defense costs if a court later finds no duty to defend.
What Is Insurance Bad Faith Under Nevada Law?
Bad faith is a breach of the implied covenant of good faith and fair dealing in the insurance contract. Under Guaranty National Insurance Co. v. Potter, an insured must show that the insurer denied or delayed a claim without a reasonable basis and knew or recklessly disregarded that it had none. A disagreement about the value of a claim is not bad faith. Nevada also provides a statutory claim under NRS 686A.310 for unfair claims settlement practices, and NRS 42.005 removes the punitive damages cap for an insurer found to have acted in bad faith.
Can an Injured Third Party Sue the Defendant’s Insurer for Bad Faith in Nevada?
No. Under Gunny v. Allstate Insurance Co., Nevada does not recognize a bad faith claim by a third-party claimant against the insurer of the person who injured them, and the statutory claim under NRS 686A.310 belongs to the insured. A claimant may acquire the insured’s bad faith claim by assignment, often as part of a settlement, which is one reason an insurer’s handling of a demand within limits is documented with that possibility in mind.
The information on this page is educational and is not legal advice. Reading it does not create an attorney-client relationship with Hutchison & Steffen. For guidance on a specific matter, contact the Firm at 702.385.2500 in Las Vegas or 775.853.8746 in Reno.