The insured, an employer, filed a complaint against its insurer for bad faith in handling a claim. The claim arose after one of the insured’s employees was severely injured in a forklift accident. Initially, the insurer denied coverage due to the Products and Completed Operations Exclusion in the insured’s policy.
The deposition testimony indicated, however, that the insurance agents’ attempts to investigate the claims were only cursory, at best. Agents were reassigned without obtaining the necessary statements from the parties, and the insurer never notified the insured in writing that its coverage was denied.
As a result, the court held that the insurer did not properly investigate the claim prior to refusing to pay the proceeds of the policy of its insured. The court favorably cited section 146.6 of the Unfair Insurance Practices Act (UIPA) in reaching its determination, among other authorities.
The court determined that the Products and Completed Operations Exclusion did not apply so as to bar coverage, and the insurer acted in bad faith by not having a reasonable basis for denying benefits under the policy.
Date of Decision: July 26, 2007.
Bombar v. American West Ins. Co., 932 A.2d 78 (Pa. Super. Ct. 2007) (Stevens, J.)