Insurance Bad Faith

Category: legal

A tort claim against an insurance carrier for intentionally refusing to fulfill its contractual obligations, evaluate claims fairly, or settle a lawsuit within policy limits.

Insurance companies owe an implied duty of good faith and fair dealing to their insureds. If a carrier refuses to settle a clear-liability injury claim within policy boundaries (e.g., ignoring a policy-limits demand when their driver caused a catastrophic accident), and a jury subsequently returns an enormous excess verdict, the insurer can be sued for bad faith, forcing them to pay the entire judgment regardless of the original policy cap.

Common Examples

• The trial firm set up an insurance bad faith trap by issuing a time-sensitive policy-limits demand backed by undeniable medical imaging telemetry.
• Failing to execute a comprehensive investigation within the statutory thirty-day window can expose an insurance carrier to costly statutory bad faith litigation.