Insurance Bad Faith Demand Letter - Vermont

VERMONT LIABILITY-POLICY DEFENSE AND SETTLEMENT REVIEW DEMAND

Product boundary: Use this packet for a claim against an insured under a
liability policy. For first-party policy benefits, use the separate
first-party property, disability, life, or other benefit-demand product.
This template does not declare that rejecting a demand is bad faith or that
an excess result or other remedy will follow.

1. Counsel scope and authority record

A. Sender status

☐ Insured or additional insured seeking protection under a liability policy

☐ Defense counsel authorized to communicate for the insured

☐ Underlying claimant making a settlement proposal

☐ Assignee after counsel verifies the assignment and standing

☐ Excess insurer or other participant

☐ Other: [________________________________]

Authority to send this demand:
[____________________________________________________________]

Standing, assignment, consent, privilege, disclosure, and conflict issues:
[____________________________________________________________]

B. Policy and underlying claim

C. Coverage and control

D. Settlement and exposure

Counsel's current-law and policy memorandum attached: ☐ Yes

E. Legal theory gate

Delete every unapproved theory, label, and consequence from the final demand.

2. Sender and delivery

Date: [__/__/____]

From:

[Name]

[Firm or organization]

[Role and client]

[Address]

[Email and telephone]

To:

[Insurer]

[Claims professional, supervisor, or counsel]

[Address]

[Email]

Authorized copies to:

[Insured, defense counsel, excess carrier, broker, claimant's counsel, or other
authorized recipient]

Delivery method selected after policy and privilege review:

☐ Policy-required method ☐ Certified mail ☐ Courier ☐ Email

☐ Other: [________________________________]

Re: Liability-policy defense and settlement review

Dear [Recipient Name]:

This communication requests a documented review of the defense, coverage,
settlement, and exposure issues identified below. It is sent by [SENDER] in the
capacity and under the authority recorded above. The sender does not intend it
to waive, shorten, or extend a policy term, claim, defense, objection,
privilege, deadline, or right.

3. Underlying matter

A. Claims, parties, and posture

[Describe the underlying allegations, claims, parties, defenses, procedural
posture, pending motions, discovery, experts, and material dates.]

[____________________________________________________________]

B. Liability and causation

C. Damages and exposure

Allocation, comparative-fault, coverage, contribution, lien, setoff,
collectability, and approval issues:
[____________________________________________________________]

4. Policy and defense record

Relevant policy terms:

Defense activity and material case developments:

5. Settlement opportunity

The current proposal is:

[State every material term, amount, release, protected party, lien or approval
condition, payment timing, confidentiality term, and dismissal sequence.]

[____________________________________________________________]

Evidence and analysis supporting the proposal:
[____________________________________________________________]

Issues requiring clarification before acceptance:
[____________________________________________________________]

Authority or contribution requested:
[____________________________________________________________]

The sender offers the proposal through [TIME] on [__/__/____], unless the
sender withdraws or extends it in a writing approved by counsel. The stated date
is a settlement term; the sender does not intend it to alter another legal,
policy, procedural, or contractual deadline.

6. Requested insurer action

Please complete the following before the proposal expires:

☐ Confirm the correct policy, insureds, limits, and remaining limits

☐ Confirm defense and indemnity positions

☐ Identify each reservation, exclusion, condition, or allocation relied upon

☐ State the current liability, causation, and damages evaluation

☐ State settlement authority

☐ Tender the supported amount of $[________________________________]

☐ Request additional information and explain its relevance

☐ Notify and coordinate with excess or other insurers

☐ Advise the insured of the insurer's current evaluation of personal exposure

☐ Address contribution above limits

☐ Other: [________________________________]

7. Record for further review

The sender requests that the insurer preserve and consider the contemporaneous
policy, defense, claim, evaluation, communication, authority, and settlement
records relevant to this matter. This request does not state that a sanction,
adverse inference, discovery ruling, or separate cause of action is automatic.

Known records, custodians, systems, or date ranges:
[____________________________________________________________]

8. Requested written position

If the proposal is not accepted, please provide a written response stating:

1. The policy and factual basis for the decision;
2. The liability, causation, and damages evaluation;
3. The authority requested and granted;
4. Any missing information material to settlement;
5. Any proposed counteroffer or alternative resolution;
6. The insurer's plan concerning the insured's asserted exposure; and
7. The next review date or decision point.

No statement in this template should be used to threaten automatic bad-faith,
excess-liability, fee, interest, exemplary-damage, discovery-sanction,
regulatory, or evidentiary consequences. Counsel must separately establish each
claim, remedy, and procedural step under current controlling authority.

9. Response and signature

Please respond to:

[Name]

[Address]

[Email]

[Telephone]

Sincerely,

__________________________________

[Name]

[Role]

[Vermont attorney ID, if applicable]

10. Attachments

☐ Complete policy, declarations, and endorsements

☐ Reservation, denial, or coverage correspondence

☐ Pleadings, material orders, and docket schedule

☐ Liability, causation, damages, and expert material

☐ Defense evaluations and authorized communications

☐ Current settlement proposal and prior proposals

☐ Lien, approval, release, and payment information

☐ Excess or other-insurance correspondence

☐ Other: [________________________________]

11. Final review

☐ Product used only for a liability-policy underlying claim

☐ Sender status and authority verified

☐ Standing, assignment, consent, privilege, and conflicts analyzed

☐ Complete policy and endorsements reviewed

☐ Defense, indemnity, reservation, settlement-control, and cooperation terms
reviewed

☐ Underlying liability, causation, damages, and procedure accurately summarized

☐ Settlement proposal includes every material term

☐ Insured and excess interests addressed

☐ No automatic bad-faith or excess-liability conclusion stated

☐ No first-party benefit theory imported

☐ Every legal and regulatory theory independently grounded or removed

☐ Proposal date does not replace another deadline

☐ Unused alternatives and drafting notes removed

☐ Vermont attorney approved the final demand