Tips On The Use Of Experts In Insurance Coverage Litigation

Huiyi Chen | Jenner & Block

The use of experts in coverage litigation shares a lot of commonalities with that in other types of litigation, but also has its own unique issues of which practitioners need to be mindful.

Unlike most specialized areas of litigation, insurance coverage litigation often encounters the use of experts in a vast variety of substantive areas—different first-party insurance policies may require expertise about different types of causation and losses, and the subject matter of third-party coverage disputes often depends on the issues in the underlying litigation, which could vary from medical malpractice to chemical pollution. The author recently spoke at an ABA panel* on how to navigate the thorny issues in the use of experts in insurance coverage litigation and has a few practical tips to offer.

  • Maintain due diligence throughout the expert engagement. The first thing counsel wants to avoid is the opposing party finding materials your experts published in the past that directly contradict their opinions offered on your client’s behalf –they can then use those materials in deposition or cross-examination at trial. Sometimes there aren’t a lot of candidates in a particular area of expertise and litigators may not have much latitude in picking an expert (especially when insurers/reinsurers in different layers want to engage different experts instead of sharing the same ones). Other times, there is a strategic advantage to engage an expert first so that your opponent cannot. Even under such circumstances, due diligence on the expert’s past publications and reputation is critical so that you are at least aware of any potential weaknesses and inconsistencies and can try to navigate around them. Due diligence is not a one-off practice before you engage an expert; instead, it should be a continuous effort throughout the litigation. This is especially important considering the prevalent use of social media nowadays and because experts tend to be active speakers and writers.
  • Consider using experts in a privileged capacity. Not all experts need to testify. There may be benefits in having two separate sets of experts looking at the same issues or data sets early in the case to “test the waters.” Experts can also be helpful in the context of mediation and settlement negotiations. Be mindful, however, that the law in your jurisdiction regarding privilege protection over non-testifying experts might be stricter than Federal Rule of Civil Procedure 26(b)(4)(D), and you might end up having to disclose what you presumed to be privileged and confidential. Experts engaged at the claims adjustment stage (even in anticipation of litigation) might work on compilation of facts or data that a court later may find to be non-privileged. It is good practice to ascertain the parameters of non-testifying expert privilege protection in your jurisdiction to inform your decision of expert engagement and communications.
  • Avoid exclusion of your experts. Timely and adequate disclosure of expert opinions and the bases of the opinions is essential to maintain your expert’s ability to testify at trial. A recent Fifth Circuit decision upheld the trial court’s decision to strike an insurer’s causation expert’s reports and deposition because the initial report was “preliminary,” contained “no real opinions,” and lacked “a complete analysis or findings section,” and because the expert untimely submitted a supplemental report on the day of the close of discovery. AIG Eur., Ltd. v. Caterpillar, Inc., 831 F. App’x 111, 115 (5th Cir. 2020). Another common pitfall that can lead to expert exclusion is using experts to testify to the ultimate question of law or the meaning of the policy terms at issue. Contract interpretation is usually a question of law for the court, but insurance policies often contain specialized terms that have a definite meaning in the custom and practice of the insurance industry or some other specialized discipline, and they may warrant expert testimony. Carefully drawing a line between the two is critical in preserving expert testimony related to the meaning of policy terms.

In sum, the use of experts in coverage litigation shares a lot of commonalities with that in other types of litigation, but it also has its own unique issues of which practitioners need to be mindful.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Countering the Bad Expert: Don’t Expect Jurors to Deliberate Past the BS on Their Own

Dr. Ken Broda-Bahm | Holland & Hart

In my opinion, it is one of the most interesting and important areas of social science at the moment. And if it’s not that, then it’s certainly the sassiest. A group of researchers has been focused on our susceptibility and resistance to various forms of bad information, disinformation, misinformation, rumors, bald-claims, conspiracy theories, and fake news. And I can just picture one of the researchers plaintively raising the question, “Can’t we just call it ‘bullshit?’” Well, they decided that they could, so now we have peer-reviewed scholarly articles on bullshit influence, persistence, and vulnerability. We even have the sine qua non of academic tools — a validated psychometric measure called the “Receptivity to Bullshit” Scale.

While it won’t be a good look to be applying that scale to potential jurors as they come into court, the overarching concept and research findings are relevant to litigation, since it is a measure of how gullible people can be when presented with information that lacks clear meaning or foundation. The question can be particularly important when it comes to expert testimony: you have a situation where there is complex information, as well as economic motive for a particular answer, so there’s a real chance that your jurors just might be presented with some bullshit. Researchers have found that, while susceptibility is significant, people can often counter this bad information through reflection. When they have to try explain in their own words why a bullshit idea is actually valid, they become significantly less likely to support it. So, you would think that group deliberation, where individuals are called on to explain and defend their positions, would be the ideal setting for countering testimony that lacks clear meaning or foundation. And in many circumstances it is. But based on a new study, there seems to be unique susceptibility when it comes to expert testimony. In this post, I’ll explain those study results and share a few implications when it comes to countering a bullshitting expert on the other side.

The Research: Expert Bullshit Is Different From Other Bullshit

Defining bullshit as “information constructed with a carefree indifference for conveying truth, accuracy, clarity, or meaning that is often used to impress, persuade, or otherwise mislead others,” the study (Littrell, Meyers & Fugelsang, 2022) tested susceptibility to various forms of bullshit, including pseudo-profound statements and fake news headlines, as well as scientific statements that were either anonymous or sourced to experts. Specifically, they looked at whether reflection (e.g., being asked to “describe in detail why the statement below is or is not true”) could be a cure. They found that while reflection can reduce the effects of fake profundity and fake news, there is a blind spot when it comes to expert opinion.

This suggests that we cannot expect jurors to reason their way out of questionable scientific testimony in the same way they deliberatively respond to other questionable information. The reason that statements from perceived experts seem to work differently comes down to something the researchers call the guru effect: “People often perceive bullshit statements from purported experts as more meaningful and convincing than bullshit attributed to anonymous sources.” To some extent, the research participants also seem to outsource responsibility for the explanation from themselves to that expert. As the researchers note, “failing to generate an explanation for how something works makes individuals doubt the knowledge they possess, but not the knowledge others possess.”

The Implications: Protect and Empower Your Jurors

A good trial attorney, of course, wouldn’t expect jurors to reason their way independently to a discovery of the problems with an opposing expert. That litigator has other tools — namely cross-examination and opposing experts — that were not available in the research setting. At the same time, both courts and attorneys have good reason to be sensitive to the particular risk that comes from a bad expert.

An Additional Reason for Daubert

The classic response to the possibility of bad expert evidence has been that jurors are the gatekeepers. Now, however, in a post-Daubert climate, judges are often the ones deciding whether proposed testimony has scientific merit that can be applied to the facts of the case. This research suggests that there is good reason for that. While the kinds of reflection promoted by deliberation are very valuable on a wide array of common-sense determinations, these collective tools can fail when jurors are outside the realm of their own experience and understanding. For those who cite social science to the court, this study might add to your motion against the other side’s bad expert.

An Additional Reason to Unpack the ‘Why’ and to Be the Better Teacher

The research finding also underscores the intuition that expert witness testimony should never just be presented. It should be taught. The more jurors outsource their judgment to someone else, the more susceptible they are to bad information. But the more they come to understand the process, the steps, and the reasons underlying an expert’s conclusions, the more they can appreciate and use your expert’s counter. This “show your work” emphasis should be a reminder to your testifying expert that they are not there simply to be an “authority.” They are there to be the better teacher. Ultimately, it is as much about being clear, concrete, and engaging as it is about being right.

Five Common Mediation Mistakes That Create Obstacles to Settlement

Hon. Lynn O’Malley Taylor (Ret.) | JAMS

Mediation is often a grueling and exhausting process. The right mediator should be instrumental in helping the parties reach a resolution. At the same time, however, mediators are not miracle workers. Negotiators often hinder their chances of resolving cases by making mistakes prior to, and/or during, the mediation. Avoid these five mistakes to maximize the chances of settlement.

  1. Anchoring Too High or Low

Many lawyers view the first offer or demand as a game of chicken—worrying that if they move first, they are signaling weakness. But if your offer is thoughtful and strategic, there are advantages to being the first to move.

The first offer you make in a negotiation is your anchor. It tells the other side the general range you are targeting for a deal. A common mistake is anchoring too high or too low. For example, a plaintiff may come in with a steep ask that is outside their true range of expectations, or a defendant may enter with an amount that is too low to be considered even nuisance value.

Both of these anchors threaten the success of the mediation and send the message that you are not interested in engaging or are being completely unrealistic and unreasonable.

While your opening ask is never your final ask, it should be within a reasonable range of where you are targeting (after a few moves), and it should not be a universe away from your walkaway—the point where you decide that rolling the dice in litigation is a better alternative. Investing the time before mediation to create a strategy for your anchor and your subsequent moves is invaluable.

  1. Failing to Adequately Prepare for the Mediation

Not spending adequate time preparing for the mediation may likely prolong the process and be costly to the clients.

Before mediation, lawyers and clients should do a thorough evaluation of the costs and benefits of the case. Consider the evidentiary record. Evaluate chances of success on dispositive motions and at trial. Review controlling case law. Ponder the counter-factual and legal arguments your adversary is likely to make. And as discussed above, create a strategy to get to your desired outcome.

In addition, lawyers should prepare their client for what to expect. Failing to do so can be disastrous, particularly if the client’s expectations are unrealistic. For many clients, mediation will be the first time they will participate directly in settlement negotiations. It is a mistake not to discuss the financial, time and emotional costs of going to trial. Many clients do not recognize or understand the risks and uncertainty involved in trying their case, or consider the benefits of obtaining a mediated settlement with a certain result.

  1. Not Accounting for Compounding Risks

In preparing their risk assessment of the case, negotiators often forget to consider compounding risk. In other words, in determining the settlement value of the case, negotiators consider each risk in isolation, not as a whole. For example, if there are four legal issues that can impact the value of a case, it is important to consider what the value is not just if you win or lose on one of them, but varying outcomes, including losing on all of them. Similarly, you need to consider the compounding effect of procedural risks, such as the risk of losing on summary judgment plus the additional risk of losing at trial. Failing to do so can lead to an inflated expectation of settlement value.

  1. Making Premature Ultimatums

Negotiators often bluff; it’s part of the game. But when a negotiator routinely cries wolf by issuing ultimatums that they do not stick to, they lose credibility. This presents a problem when later in the negotiations that party views something as a dealbreaker and their adversary doesn’t believe them. This can quickly lead to frustration and impasse.

The most common premature ultimatum is “best and final.” As mediators, we are cautious when we hear this phrase because nine times out of 10, the party backs down. An offer is your best and final when—and only when—you are unwilling to accept any other number, no matter how immaterial the difference may be. You will walk away unless that is the number that is agreed upon.

  1. Being Overly Litigious

The goal of mediation is to negotiate a deal, and overly aggressive lawyers can hinder that process. One of the biggest and most common obstacles in mediation is when litigators refuse to budge from their courtroom arguments and conduct themselves as though they are presenting their case to a judge or jury. Mediation and litigation are different, and lawyers’ roles in each are too.

Overly litigious behavior tends to favor avoiding joint sessions. Joint sessions, however, can be extremely productive if the participants are collaborative, but they can be entirely destructive to the mediation process when they are not. A joint session not only gives the parties the opportunity to tell each other that they have come to the mediation in good faith, but it may also aid the principals in exchanging information directly and brainstorming ideas for settlement.

Similarly, writing a mediation statement in the same manner as a dispositive motion, replete with legal argument, is a mistake. Instead, focus on gating issues that need to be addressed prior to resolution, as well as potential settlement structures and proposals that each party may be willing to explore.

Finally, litigators should let the clients play an active role. Their input and feedback during the negotiations are critical to ensuring that their interests are met and that a negotiated deal is acceptable.

In closing, an experienced mediator can help the parties overcome impasse. In the end, however, the parties control whether they reach an agreement. Mediation participants can avoid adding roadblocks by doing their homework and being thoughtful and strategic in their negotiations, rather than adversarial and argumentative. If the parties want to settle, the worst thing you can do is negotiate in a way that ends the mediation prematurely without knowing whether an acceptable deal is obtainable.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Nevada Supreme Court Holds That Insureds Can Use Extrinsic Evidence to Prove Duty to Defend

Bethany L. Barrese | Saxe Doernberger & Vita

The recent Nevada Supreme Court ruling in Zurich American Insurance Company v. Ironshore Specialty Insurance Company benefits insureds seeking to establish an insurer’s duty to defend. As a matter of first impression, the court clarified that insureds have the burden to prove that an exception to a policy exclusion applies in order to trigger the insured’s duty to defend. However, while the policyholder may use extrinsic evidence to establish the insurer’s duty to defend, the insurer may not use extrinsic evidence to deny that duty.

The facts of the underlying claim are set in the 2000s when the insured subcontractors worked to build thousands of homes in Nevada. The subcontractors were insured by Zurich American Insurance Company (“Zurich”) during that period. After the homes were complete, the subcontractors switched from Zurich to Ironshore Specialty Insurance Company (“Ironshore”). Between 2010 and 2013, homeowners brought claims against the subcontractors alleging that the properties were damaged due to construction defects. The subcontractors tendered the claims to Zurich as the insurer at the time of construction. Zurich then sought defense and indemnification from Ironshore. Ironshore denied coverage under a “continuing and progressive” policy exclusion, claiming that the property damage occurred due to faulty work that predated the Ironshore policy. Notably, an exception to the exclusion applied if “sudden and accidental” property damage occurred within the Ironshore policy period. Given that the underlying lawsuits did not include specific allegations describing when or how the property damage occurred, Ironshore and Zurich disagreed on whether the exception to the exclusion was triggered.

Zurich sued Ironshore in a series of cases, and the courts issued conflicting decisions as to whether Ironshore had the burden of proving that the exception to the exclusion applied. One federal court granted summary judgment in favor of Ironshore, implicitly concluding that the insured had the burden of proving that the exception to the exclusion applied.The second federal court concluded that Ironshore had a duty to defend because Ironshore, as the insurer, failed to prove that the exception to the exclusion did not apply. With conflicting outcomes, Ironshore and Zurich each appealed. The Ninth Circuit certified the following questions to the Nevada Supreme Court:

  1. Whether, under Nevada law, the burden of proving the applicability of an exception to an exclusion in an insurance policy falls on the insurer or the insured?
  2. Whichever party bears such a burden, may it rely on evidence extrinsic to carry its burden, and if so, is it limited to extrinsic evidence available at the time the insured tendered the defense of the lawsuit to the insurer?

In response to the first question, the Nevada Supreme Court followed the majority approach adopted by most states, holding that the insured has the burden to prove that an exception to an exclusion applies. Under Nevada law, the insured already carries the burden of establishing the possibility of coverage in general. The burden of proof shifts to an insurer who wishes to preclude that coverage under an exclusion. The court reasoned that an exception to the exclusion would revive coverage where there would otherwise be none; therefore, the burden shifts back to the insured to re-establish coverage under an exception to an exclusion.

In response to the second question, the Nevada Supreme Court reasoned that the duty to defend must be determined at the outset of litigation based upon the allegations in the complaint and any other facts available to the insurer; therefore, the insured may use extrinsic facts to prove the potential for coverage and establish the insurer’s duty to defend. The Court’s decision to allow extrinsic evidence to establish coverage but not to negate coverage is a welcome outcome for policyholders. The duty to defend is usually determined by the allegations in a complaint, regardless of their truthfulness or accuracy. It is advantageous for policyholders to be permitted to provide evidence outside the complaint to support a finding that a duty to defend is owed, especially where the allegations in the complaint are insufficient to trigger coverage on their own. Furthermore, while some jurisdictions permit an insurer to introduce extrinsic evidence to negate the duty to defend, the Nevada Supreme Court was careful to clarify that extrinsic evidence can only be used to establish a duty to defend, not deny it.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Application of Two Construction Contract Provisions: No-Damages-For-Delay and Liquidated Damages

David Adelstein | Florida Construction Legal Updates

A recent Florida opinion between a prime contractor and a Florida public body touches upon two important issues:  (1) the application of a no-damage-for-delay provision; and (2) the application of a liquidated damages provision.   Both provisions find there way into many construction contracts.  Unfortunately, the opinion is sparse on facts.  Nevertheless, the application of these provisions is worthy of consideration.

In this opinion, Sarasota County v. Southern Underground Industries, Inc., 2022 WL 162977 (Fla. 2d DCA 2022), a county hired a contractor to install sanitary and water piping underneath a waterway.  During construction, a nearby homeowner complained that vibration from the drilling caused damage to his home.  As a result, the county stopped the contractor’s work to address a potential safety issue, as it was contractually entitled to do.  The contractor hired a structural engineer to inspect the house and the engineer issued a report determining that any alleged damage was cosmetic and that there was sufficient monitoring of the vibrations to prevent future damage.  The contractor also had an insurance policy to cover any homeowner claim for damage.  However, upon receipt of the engineer’s report, the county did not lift its stop work order.  Rather, the stop work order remained in place for an additional 71 days.


The contractor sued the county to recover its costs during the additional 71 days the project was stopped.  The county relied on its no-damages-for-delay provision in its contract.  The trial court, as affirmed by the appellate court, found that the county’s work stoppage for an additional 71 days amounted to active interference and bad faith.

Although ‘no damages for delay’ clauses are recognized in law, they will not be enforced in the face of governmental ‘fraud, bad faith, or active interference’ with the performance under the contract.”  Sarasota County, 2022 WL at *2 (citation omitted).   There was no reason to keep the stop work order in place after it was found it was safe to resume the construction activities.


However, the trial court did assess liquidated damages against the contractor because the matter with the complaining homeowner had not been resolved by the contractual date for final acceptance.

For a liquidated damages clause to be enforceable, “the damages consequent upon a breach must not be readily ascertainable,” and “the sum stipulated to be forfeited must not be so grossly disproportionate to any damages that might reasonably be expected to follow from a breach.” “[L]iquidated damages clauses can exist only when they provide for ’damages’ (something to be given by one party who breaches the contract to the other party to compensate the other party for his loss which is a consequence of that breach).”

Sarasota County, 2022 WL at *2 (citations omitted).

The appellate court reversed the trial court’s assessment of liquidated damages because the county did not sustain any loss due to any delay to final acceptance.  The contractor had completed all of its work by the contractual date except for resolving the complaining homeowner’s claim.  “Thus, because the County had the full use for the completed construction project for over two years before final acceptance, ‘the sum stipulated to be forfeited,” was “grossly disproportionate to any damages that might [have been] expected to follow from a breach.’”  Sarasota County, 2022 WL at *3 (citation omitted).


The limited facts do not do this opinion any justice.  However, it’s important to appreciate that a no-damages-for-delay provision is not the be-all-and-end-all of a delay claim.  It just isn’t!  As this court found, the work stoppage beyond the point it should have been stopped was active interference and bad faith.

As for the liquidated damages argument, that’s a head scratcher unless the court’s point is that once the government got beneficial use of the project, any delay in its final acceptance of the contract constituted a penalty even though sophisticated parties agreed to this provision.  (Not how the court worded it though!). Also, this opinion could have the affect of opening up Pandora’s box by allowing a party to take discovery on financial information or otherwise relative to actual damages when, frankly, this defeats the purpose of the liquidated damages provision.

Liquidated damages provisions on private jobs are negotiated by sophisticated parties.  On public jobs, you know what the liquidated damages are and how the provision is generally worded and can factor that into your pricing, no different than any other risk included in the contract.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email