Appellate Court Sets New Precedent for Bad Faith Insurance Claims
An important insurance bad faith decision out of a New York appellate court clarifies important Court of Appeals precedent regarding the bad faith pleading standard, while also clarifying a number of issues that the courts have never addressed, including consequential losses and attorney’s fees. Even though decided in New York courts, this is an important decision to all insurance companies when it comes to setting precedent for bad faith claims, as we discuss in greater detail below. The Case The case started with property owners filing an insurance claim for direct damage and physical loss to their property as a result of construction work done in the adjoining building. According to reports, the property owners filed a claim with their insurance company, National Union Fire Insurance Company, which did not respond or pay the claim. According to them, National Union, instead “made unreasonable and increasingly burdensome information demands” with the hopes that the owners would drop the claim entirely. As a result, the owners filed claims alleging breach of contract and of the implied covenant of good faith and fair dealing. The Decision & Its Implications While the Supreme Court dismissed the claim, finding that the property owners failed to specify how consequential damages were foreseeable to National Union when they entered into the contract, the First Department appellate court reversed this decision, and in doing so, effectively changed the minimal pleading standard required for bad faith claims when it comes to what a plaintiff must specify in alleging how consequential damages were reasonably foreseeable. According to the decision, the division effectively found that all the plaintiff has to do is state the types of consequential damages and that they were reasonably foreseeable instead of explaining why the damages were reasonably foreseeable. A number of insurance companies around the country, including those in Florida, have effectively argued in the courts that these types of claims are duplicative of breach of contract claims, and should be dismissed. What this decision does is essentially separate the two claims—breach of contract and bad faith managing of an insurance claim—making it clear that both can be brought on their own, irrespective of each other. This is important because it is the first decision that helps clarify what previous court decisions meant regarding what the bad faith pleading standard entails, while also arguably recognizing specific types of damages and losses that were not previously recognized. Contact Our Florida Insurance Bad Faith Defense Attorneys Today To Find Out More At HD Law Partners, our insurance carrier attorneys have represented a number of companies that have had bad faith claims brought against them. Contact our Florida bad faith defense attorneys today to find out more. Resource: insurancebusinessmag.com/us/news/breaking-news/new-york-appellate-court-sets-new-precedent-for-bad-faith-claims-123694.aspx Florida Appellate Decisions Push Bad Faith Standard & Raise Concerns Posted in Insurance Bad Faith | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us