What is the difference between fraud and bad faith in insurance litigation cases?
In Delaware, insurance litigation law is designed to protect policyholders from unjust or unfair practices by insurance companies. Fraud and bad faith are two possible legal issues that may arise from the actions of an insurance company. Fraud is defined as an intentional deception or misrepresentation made by one party to another with the intent to gain a financial or other material advantage. An example of fraud in an insurance litigation case could be a policyholder misrepresenting the details of a claim. Bad faith is defined as a failure by an insurance company to adequately attempt to investigate or settle a claim in a timely and fair manner. Bad faith does not require an intent to deceive but is an action or lack thereof that violates the duty of good faith and fair dealing that the insurance company has to the policyholder. An example of bad faith in an insurance litigation case is an insurance company or its representatives delaying or denying payment of a legitimate claim without a valid basis. In summary, fraud is the intentional misrepresentation of facts while bad faith is a failure by an insurance company to fulfill their duty to the policyholder. While both issues are serious, a successful lawsuit of either will usually depend upon the facts and circumstances of the case.
Related FAQs
What is a joinder of parties in an insurance litigation case?What is the difference between an insurer's liability for bad faith and breach of contract in insurance litigation cases?
What is a breach of the covenant of good faith and fair dealing in an insurance litigation case?
What evidence is required to establish causation in an insurance litigation case?
What is a "duty to defend" dispute in an insurance litigation case?
What is a choice of law clause in an insurance litigation case?
What is "setoff" in an insurance litigation case?
What preparatory steps should I take to initiate an insurance litigation claim?
What are the different types of motions in an insurance litigation case?
How do I determine whether an insurance policy is adequate to protect my interests in an insurance litigation case?
Related Blog Posts
5 Factors to Consider When Choosing an Insurance Litigation Lawyer - July 31, 2023What You Should Know About Insurance Litigation Law in 2021 - August 7, 2023
Understanding the Process of Insurance Litigation Law - August 14, 2023
How to Avoid Insurance Litigation Litigation - August 21, 2023
9 Essential Steps to Resolve an Insurance Litigation Dispute - August 28, 2023