A federal trial court has held that an expert opinion that relates to when a claim was made or the application of certain exclusions is inadmissible in coverage litigation, while expert opinions related to the insurance industry’s customs and practices are allowed. Foundation Health Servs., Inc. v. Zurich Am. Ins.Co., 2016 WL 1449678 (M.D.La. April 13, 2016).

The case arose when the insured sought coverage for defense costs and other losses incurred in connection with the settlement of a claim brought by the Department of Justice. The insurer denied coverage for the claim under two separate policies on several bases and the insured filed suit, asserting a claim of bad faith, among others. In support of its position, the insured retained an expert witness to testify “whether [the insurer] met its obligations and responsibilities in connection with the claim at issue under custom and practice in the industry,” which the insurer moved to exclude primarily on the ground that the expert drew impermissible legal conclusions.

In excluding the expert’s testimony regarding when the relevant claim was made and the application of particular exclusions, the court explained that experts retained in connection with insurance disputes “may be allowed to testify regarding insurance industry standards for claims adjusting, but not the ultimate legal conclusion that an insurance company acted in good or bad faith when adjusting a claim.” The court noted that legal conclusions are inadmissible because they “invade[] the court’s province and [are] irrelevant.” The court allowed the expert’s testimony that pertained to the insurance industry’s customs and practices, including as to an insurer’s claims handling obligations.