What is the difference between fraud and bad faith in insurance litigation cases?

Fraud and bad faith are two different legal concepts when dealing with insurance litigation cases in Maryland. Fraud involves an intentional deception by an individual or party with the intent to gain financially or otherwise. It is a criminal act under the law and can result in significant civil and criminal penalties. On the other hand, bad faith is an intentional breach of a contract by an insurance company. It involves the company failing to uphold their obligations under the contract, such as the refusal to make a proper payment or fulfilling any of the other responsibilities of the insurer. Unlike fraud, bad faith is a civil wrong and does not involve criminal penalties. The only recourse for a wronged party is to sue the insurance company for damages. In some cases, the aggrieved party can also be awarded punitive damages, which are paid to the plaintiff in order to punish and deter the insurance company from engaging in such conduct in the future. In summary, fraud is a criminal act that can result in criminal penalties, while bad faith is a civil wrong that only results in financial repercussions for the insurer. Both concepts involve intentional conduct and plaintiffs can still sue for damages due to bad faith.

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What is the difference between fraud and bad faith in insurance litigation cases?

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