INSURANCE AND CONTRACT DISPUTES

The Drinnon Law Firm, PLLC., has experience in many types of commercial disputes including contracts and quasi-contract tort litigation which may arise when a party does not act in good faith when legally obligated to do so or when fraud or deception by a party harms another such as in the area of insurance contracts and the duty they owe their insureds. Just as an insured owes its insurer a duty to cooperate in providing notice and information of and about a claim, the insurance company owes it’s insured a reciprocal duty.

Insurance companies have a duty to act reasonably and in good faith; quite often, they do neither. An insurance company’s denial of a claim may rise to the legal level of “Bad Faith” which may allow recovery of more than the insurance policy limit as a result of the damages sustained due to the insurance company’s refusal to act in accordance with their legal duty.

An insurance policy is a contract between the insured and the insurance company. This agreement requires that the insurance company act in “good faith” when responding to or handling a claim under the insurance policy. If an insurance company unreasonably withholds the benefits of the policy from its insured or a third party, the insurance company may have breached its duty and committed bad faith. The facts and circumstances of each case including the insurance contract may vary and will ultimately determine whether bad faith has occurred. General examples of how an Insurance company can commit bad faith are as follows:

• Failing to promptly and thoroughly investigate a claim.


• Deliberately delaying payment.


• Unreasonably denying benefits to a claim.


• Refusing to settle a case brought against the insured by a third party within policy limits.


• Failure to reimburse the insured for the actual financial loss incurred.


• Using unreasonable interpretations in translating the language of the policy.

Unfortunately, it is not unusual for an insurance company to limit or even deny coverage of a claim without proper justification or warning. Not every act by an insurance company is bad faith. Not all claims are covered nor justified however, an insurance company must act reasonable. If you have been denied coverage or otherwise treated unreasonably by an insurance company you may have a case for bad faith in addition to the policy coverage. The Drinnon Law Firm, PLLC, will assist you in an initial evaluation of whether or not the insurer’s actions in your case may have breached your insurance policy contract and amount to a level of bad faith. Keep in mind that state, not federal law, regulates insurance practices. There is no uniform definition for insurance bad faith from state to state and the individual circumstances of each case will ultimately determine whether bad faith has occurred.