Insurance Expert Witness On Bad Faith Cases – Part 5

In Negotiating and Settling Insurance Bad Faith Cases , insurance expert witness Guy O. Kornblum of GK Consultants, LLC, writes:

Thus, a bad faith claim has these three very separate and distinct components: A breach of contract is not bad faith – there must be an examination of the conduct of the company to determine if the manner of handling the claim was consistent with “good faith” principles. However, proof of bad faith is not enough to impose punitive damages – “something more” is required, which has been expressed as an “evilness” in the corporate scheme of things, or the “collective corporate conduct.”

The different standards and burdens applied must be evaluated. If not, they offer the defense an excellent opportunity to “compartmentalize” the case and defeat the plaintiff’s effort to obtain relief for the wrongs done in an amount sufficient to accomplish the goal of giving notice that such conduct should be stopped.

LOOKING AT LIABILITY FOR BAD FAITH Assuming that there is contractual liability, the next question is whether the compensatory damages are limited to the contract standard as contemplated at the time of the agreement or the tort standard based on proximate cause and foreseeability.

See the next blog entry for Mr. Kornblum’s indicia of bad faith conduct under various standards: