Trial Court Rules in Favor of S&B Client Allowing Bad Faith Claim to Proceed

An insurer who failed to inform S&B’s client of all applicable coverages, specifically denied the existence of a policy that would provide coverage, and offered repeated patterns of conflicting positions on the policy coverages will face a proceeding subsequent to trial on its lack of good faith claims handling. Minnesota Statute Section 604.18 allows a party to seek additional penalties and costs if the insured party can show two things: (1) that the insurance company has no reasonable basis for denying policy benefits; and (2) that the insurance company has a lack of reasonable basis for the denial of benefits or has acted in reckless disregard of the lack of reasonable basis for the denial of benefits. In order for a party to seek the additional damages, the trial court must agree that the policy holder has prima facia evidence of the insurer’s bad conduct that is actionable under the statute. If that burden is met, the policy holder is allowed to amend its Complaint to seek these additional penalties and costs.

For a complete copy of the Court’s Order click here.

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