Whether a Liability Insurer Engaged in “Bad-Faith” is Typically a Question of Fact

The question or issue of whether an insurer engaged in “bad-faith” is typically a question of fact for the jury based on the totality of the circumstances. Moore v. Geico Ins. Co., 2016 WL 736824 (11th Cir. 2016) (reversing summary judgment against insurer in bad faith claim since there were unresolved questions of fact). This is because “[i]in more cases…the inherently flexible nature of the ‘totality of circumstances’ standard renders a bad-faith claim unsuitable for summary judgment.” Moore, 2016 WL at *3.

The Moore Court dealt with an insured suing its automobile liability insurer for bad-faith for failing to settle an underlying third-party claim within the liability insurance policy’s limits. The underlying claim resulted in a jury verdict against the insured well in excess of the insurance policy’s limits triggering the insured’s bad-faith claim against its liability insurer.

Noteworthy to the factual issue of bad-faith, the Moore Court explained the basis of bad-faith claims:

An insurer, in handling the defense of claims against its insured, has a duty to use the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business. For when the insured has surrendered to the insurer all control over the handling of the claim, including all decisions with regard to litigation and settlement, then the insurer must assume a duty to exercise such control and make such decisions in good faith and with due regard for the interests of the insured. The insurer must investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so.

Moore, 2016 WL at *2 quoting Berges v. Infinity Ins. Co., 896 So.2d 665, 668-69 (Fla. 2004).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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