11/26/2021
In 2021 Atty Otto won a case for a client against Erie Insurance Exchange after Erie had refused to acknowledge that its policy covered a loss of electronic software suffered by the insured client.
As a consequence Erie now faces a Bad Faith claim, which will be tried by a judge in the next year. When an insurer acts improperly by failing to act in good faith handling of a claim the insurer subjects itself to a separate claim for Bad Faith. Such Bad Faith claims carry the potential for money damages for costs, attorney fees, and Punitive Damages aimed at punishing the insurer for acting in Bad Faith. In a recent case, Erie paid over 3 mil $ as a result of such a Bad Faith claim.
Based on a number of cases over recent years, it is apparent that some insurers adopt certain claim handling tactics and practices which expose them to Bad Faith claims. These insurers reason and their financial statements prove that they make more money by denying multiple claims knowing that most insureds can’t afford to engage in 3-4 years of litigation incurring legal time of a quarter million dollars minimum.