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Pre-Mediation Demands Within Policy Limits May Trigger Potential Bad Faith Claims

Florida Bad Faith Claims

Understanding Florida Bad Faith Claims

Where there is or may be insurance coverage for a claim, perhaps one of the most important buttons to push is bad faith. Pre-mediation demands within policy limits trigger potential bad faith claims against an insurer. An insurer’s failure to settle a third-party claim against an insured contractor may amount to bad faith when, “under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.” The potential for bad faith claims is a powerful negotiation tool, as the insurer is exposed to damages beyond its coverage limits. Not only can the insured, which suffers an excess judgment above policy limits, pursue its liability insurer for bad faith, but the claimant may also have bad faith claims as well. And where the insurer wrongfully refuses to defend an insured, a claimant may consider settling with a defendant where the insured consents to judgment and assigns its bad faith claims against the insurer to the claimant in exchange for the claimant’s agreement not to execute on the judgment.

To learn more about Florida bad faith claims, contact Florida construction mediator and lawyer Gary L. Brown at (954) 370-9970 or (954) 448-1133.