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Bad faith and excess liability

Insurance company conduct on trial!

The subject of bad faith got the industry's attention not too long ago with the case of Ballard v. Farmers Insurance Company, in which a Texas court awarded the plaintiff $32 million in a suit involving a claim for mold damage. The lion's share of the award was not for mold damage but rather for bad faith, despite contrary impressions the media may have conveyed. The concept of bad faith is particularly attractive to plaintiff's attorneys because recoveries against insurers usually result in awards in excess of policy limits, as was the situation in the Ballard case. Ordinarily there must be a showing of malice, fraud, or oppression on the insurer's part ...

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