The Pennsylvania high court refused Thursday to rule that evidence of an insurance company’s malicious intent is required for a policyholder to prevail on a bad faith claim, but attorneys say insureds will still have to clear a fairly high bar by showing the carrier knowingly or recklessly refused coverage without a reasonable basis.
“Fortunately, the court was unpersuaded by the insurers’ ‘parade of horribles.’ The insurance industry always claims, without presenting any statistical or other proof, that every coverage suit will supposedly include a bad faith claim if the courts do not impose some unduly high bad faith standard,” said Sherilyn Pastor, leader of McCarter & English LLP’s insurance coverage group.