News & Updates

Louis H. Kozloff Quoted in “Pa. Ruling Won’t Lower Bar to Prove Bad Faith,” Law360 September 28, 2017

Goldberg Segalla’s Louis H. Kozloff, a partner in the firm’s Philadelphia office and a member of the Global Insurance Services Practice Group, commented for Law360 on the recent Pennsylvania Supreme Court ruling that refused to set a standard requiring the demonstration of malicious intent in bad faith claims.

Pennsylvania Supreme Court justices ruled unanimously to affirm the Superior Court’s earlier decision that established an insurer’s ill-will or malice is a factor — but not a requirement — to determine a bad faith claim. This rests on the Superior Court’s 1994 ruling in Terletsky v. Prudential, which requires a "two-pronged" test: the prosecution must establish that the insurer did not have a reasonable basis for denying benefits, and that the insurer knew of or recklessly disregarded this lack of a reasonable basis.

“I don’t think this decision lowers the bar for establishing bad faith,” Lou told Law360. “It maintains the same relatively high bar that has existed since Terletsky was decided. For one, you have the clear and convincing evidence standard. In addition, there is the requirement that the insurer lacked a reasonable basis for denying coverage. A simple disagreement over coverage where reasonable minds can disagree isn’t bad faith.”

Lou also contributed to an alert to GS clients released shortly after the decision.

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