Insurer Defeats $1.2 Million Bad Faith Claim June 27, 2013

A devastating fire and bad faith claims against an insurer could have cost our client $1.2 million, plus extracontractual exposure, but Sharon Angelino and Paul D. McCormick, members of Goldberg Segalla’s Global Insurance Services Practice Group, proved the insurer paid all that was owed and obtained summary judgment dismissal.

The matter began when a fire occurred at a business in Buffalo, New York. The business owners submitted a claim for the loss to our client, and the insurer made $400,000 in payments. Subsequently, the business owners commenced an action for additional payments, claiming they were entitled to the full replacement cost of the structure, business interruption insurance, consequential damages, and the cost of the business in its entirety — more than $1.2 million.

Through detailed presentation of facts and analysis, we convinced the court that the insurer was trying to put the owners back in business, but the owners were instead seeking to profit from the situation. In addition, we demonstrated that the owners were not repairing or restoring the business, and therefore did not have grounds for a business interruption claim.