Insurance Bad Faith

You purchase insurance to protect yourself from events that, while unlikely to occur, are financially devasting if they do occur.   In other words, insurance exists to financially assist you when tragedy strikes – that is, when you are most in need.  As a policyholder, you pay your insurance premiums for years and even decades hoping that the insurance company will keep its end of the bargain should you ever need it.  Unfortunately, the very fact that you are turning to your insurance company precisely when you are in critical need of assistance makes you particularly vulnerable to abuse.  That low-ball offer that you would never take during normal circumstances might seem impossible to turn-down when you need the money to pay rent.  Or delays by the insurance company in investigating your claim that might otherwise appear inconsequential may result in you having to declare bankruptcy that you could have otherwise avoided.  The lawyers at ASWT have decades of experience in making sure that insurance companies keep their end of the bargain.  ASWT is prepared to assist you throughout the entire process from evaluating whether you have a claim, ensuring that you tender your claim to your insurer in manner that maximizes the likelihood of payment and negotiating with insurance adjusters to maximize your payment to filing a “bad faith” lawsuit and taking your case to trial.

Insurance Bad Faith Issues

An insurance policy is, ultimately, just a contract where you agree to pay the insurance premiums and the insurance company agrees to pay you, up to the policy limits, for any losses covered by the insurance policy.  Like all contracts, every insurance policy contains an “implied covenant of good faith and fair dealing” – basically, an understanding that the parties to the contract will not do anything which will deprive the other party of the benefits of their agreement and will do what is necessary to accomplish the purpose of the agreement, even if not expressly set out in the contract.  However, unlike most contracts, where you are limited to contractual damages for a breach, when an insurance company fails to keep its end of the bargain, you may be entitled to additional, tort-like damages (like attorneys’ fees, emotional distress, and punitive damages).

The tort of bad faith protects insureds from being forced to litigate claims which present no question requiring litigation.  Once a loss occurs, an insured can no longer buy protection for that loss from competing insurers – in essence, the insurer has exclusive and complete control over the evaluation, processing and denial of that claim.  It is axiomatic that individuals purchase insurance to protect themselves from losses that they cannot afford to bear.  This fact puts insureds in a vulnerable position: because the insured has suffered a loss which she (by definition) cannot bear, an insured is under significant pressure to accept an inadequate settlement, and because litigation is expensive, even insureds whose claims are meritorious may not sue.

Ordinary contractual remedies, therefore, are often insufficient to protect insureds.  Bad faith protects insureds from these potential abuses.  In essence, then, bad faith requires two showings: (i) that the claim was payable under the contract and (ii) that the insurer’s denial of the claim was unreasonable or without proper cause. Some common examples of bad faith include:

  • Inadequate investigation
  • Refusal to defend the insured against a lawsuit
  • Refusing to make a reasonable settlement offer/ making a lowball offer
  • Threats made against the insured
  • A delay in handling claims
  • Unreasonable interpretations of a policy

The lawyers at ASWT have extensive experience in prosecuting bad faith actions against insurance companies in litigation, at trial and through appeal.  And while insurance bad faith laws vary by state, ASWT has unique expertise in each jurisdiction to analyze case law, statutes and insurance policies to find the best outcome for our clients.

Business Interruption Insurance

Nationwide, companies are examining insurance policies to check for coverage regarding business losses during times of business suspension. This type of business insurance coverage has gained a lot of recent attention due to the coronavirus (i.e. COVID-19) and the suspension in business it has caused. Only a skilled attorney who understands the law can provide adequate analysis on these issues because often policy language is left vague or undefined. For example, while many policies claim that there is or isn’t coverage if a group of employees fall ill at the same time, there is little to no language regarding governmental shutdown orders over a national and global pandemic. Such subtle policy language is important and the attorneys at ASWT are adept at interpreting insurance policies and fighting for justice on behalf of businesses in need of insurance coverage for their very survival.

The firm recently filed business interruption class action lawsuits on behalf of a restaurant chain in Las Vegas against insurance companies that refused to abide by the terms of their own policies. To learn more, click here.

We Can Assist You When Your Insurance Company Has Failed to Keep Its End of the Bargain

You may have a claim and believe that you, your family or your business has been mistreated by your insurance carrier. No matter your situation, we are prepared to answer all of your questions and represent you through the claims adjusting process and in the courtroom.

In California, the plaintiff in a bad faith action may be able to recover some of its attorneys’ fees separately and in addition to the judgment for damages against a defendant insurer. By reaching out to us for assistance as soon as possible and for a free consultation, we will be able to quickly assess the merits of your case and let you know if you have grounds for a lawsuit. If you do, we will be the allies you need.

Bad faith cases require analysis of complex documentation, evaluation of extensive evidence, and interpretation of intricate factual details. These types of cases, typically, can only be handled by law firms with the resources necessary for in-depth investigations and that have the negotiating skill to press for the appropriate outcome. We have these resources and the skill to aggressively pursue what is in your best interests. Whether through settlement of verdict, we have a long history of success in complex class actions, mass torts and high-stakes insurance bad faith lawsuits.

Contact one of our experienced attorneys today to discuss your case.