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Insurance

Apr. 13, 2013

Insurance bad faith claims have one predicate: coverage

The manner in which an insurer observes its contractual duties, not whether it breached an express contract term, forms the exclusive inquiry of a bad faith claim. By William M. Shernoff and Howard S. Shernoff


By William M. Shernoff and Howard S. Shernoff


In first-party insurance bad faith cases, a surprisingly fundamental question often arises: Whether establishing coverage is a sufficient predicate to pursuing bad faith, or is proving an express breach of contract is required? Thus at some point during the litigation a plaintiff can expect to encounter the defense that (1) breach of contract is a predicate to bad faith, (2) the insurance company did not breach...

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