When a policyholder feels their insurance claim has been mishandled or denied unfairly, pursuing recovery for the insurer’s bad faith is often front of mind. While many states recognize a common law and/or statutory cause of action for bad faith, the circumstances that constitute bad faith vary amongst jurisdictions.

As prescribed in The Rockefeller Univ. vs. Aetna Cas. & Sur. Co., et al.,[1] New York recognizes a claim for breach of the implied covenant of good faith and fair dealing – otherwise known as bad faith – involving three elements of proof: (1) the facts establishing the insurer’s bad faith conduct must be separate from the facts giving rise to the breach of contract claim, (2) the damages sought as a result of the insurer’s bad faith must be distinct from the damages sought in the breach of contract claim, and (3) the facts must demonstrate that the insurer grossly disregarded its policyholder’s interests.

Reprinted courtesy of Bethany L. Barrese, Saxe Doernberger & Vita, P.C. and Michael A. Amato, Saxe Doernberger & Vita, P.C.

Ms. Barrese may be contacted at BBarrese@sdvlaw.com
Mr. Amato may be contacted at mamato@sdvlaw.com