Missouri’s Comparative Fault Framework and Its Impact on Liability Insurance Coverage Disputes
How pure comparative fault principles intersect with coverage analysis in Missouri injury cases
Missouri Injury & Insurance Law | missouriinjuryandinsurancelaw.com
Introduction
Missouri adopted pure comparative fault in Gustafson v. Benda, 661 S.W.2d 11 (Mo. banc 1983), eliminating contributory negligence as a complete bar to recovery. While the shift to pure comparative fault was a significant development for injured plaintiffs, its interaction with liability insurance coverage analysis is less frequently examined. This post addresses how Missouri’s comparative fault system affects the valuation of insured claims, the insurer’s settlement obligations, and the analysis of whether a refusal to settle was reasonable.
Pure Comparative Fault: A Brief Refresher
Under Missouri’s pure comparative fault system, a plaintiff’s recovery is reduced by the percentage of fault attributable to the plaintiff, but the plaintiff may recover regardless of the degree of fault. Mo. Rev. Stat. § 537.765 (2023). There is no threshold below which a plaintiff is barred from recovery. This means that even a plaintiff who is ninety percent at fault may recover ten percent of the damages from a defendant who is ten percent at fault.
The pure comparative fault system has significant implications for insurance coverage analysis. An insurer evaluating a claim must assess not only the total damages but also the likely apportionment of fault between the insured and the claimant. Errors in fault apportionment—whether attributing too much fault to the plaintiff and thereby undervaluing the claim, or failing to account for comparative fault at all—can constitute evidence of an inadequate investigation and, in appropriate cases, unreasonable claims handling.
Fault Apportionment in Multi-Defendant Cases
Missouri’s joint and several liability statute, Mo. Rev. Stat. § 537.067 (2023), was significantly modified in 2005. Under current law, a defendant is jointly and severally liable for all damages only if that defendant is found fifty-one percent or more at fault. Defendants found less than fifty-one percent at fault are severally liable only for their proportionate share. This modification has important implications for coverage analysis in cases involving multiple defendants.
In multi-defendant cases, the insurer for a defendant who may be allocated less than fifty-one percent of fault must carefully analyze whether joint and several liability will apply. Practitioners handling cases with multiple defendants should conduct coverage investigations for each potentially liable party early in the case to identify all available insurance and to understand the potential interplay between joint and several liability and individual policy limits.
Comparative Fault and the Reasonableness of Settlement Refusal
When evaluating whether an insurer’s refusal to settle was reasonable—a central question in bad faith litigation—Missouri courts will examine the insurer’s assessment of comparative fault as part of its overall evaluation of the claim’s value. An insurer that overestimated the plaintiff’s comparative fault, thereby undervaluing the claim and refusing a reasonable settlement demand, may have acted in bad faith if the overestimation was unreasonable in light of the available evidence.
Practitioners pursuing bad faith claims should obtain the insurer’s claim file through discovery and examine the adjuster’s fault apportionment analysis carefully. Contemporaneous notes, reserve changes, and internal communications about comparative fault are among the most revealing documents in a bad faith case. An insurer that consistently overestimated plaintiff’s fault despite clear evidence to the contrary has a difficult time defending the reasonableness of its refusal to settle.
Damages Assessment and Reserve Practices
Missouri law does not require insurers to disclose claim reserves in every context, but reserves are discoverable in bad faith litigation because they reflect the insurer’s contemporaneous assessment of its exposure. Mo. R. Civ. P. 56.01. A significant gap between the insurer’s reserve and the amount demanded in settlement can be powerful evidence of bad faith—it suggests that the insurer knew it had significant exposure but refused to settle anyway.
Practitioners should request reserve information and reserve change documentation in every bad faith case. The insurer will likely assert work product protection over certain reserve-related communications, but the reserve figures themselves are generally discoverable.
Conclusion
Missouri’s comparative fault framework does not operate in isolation from insurance coverage law. Practitioners who understand how fault apportionment affects claim valuation, settlement obligations, and bad faith analysis will be better equipped to identify insurer misconduct and to present compelling bad faith cases when the evidence warrants.
