What is bad faith?
Bad faith is a term used for a state law claim against an insurance company based on the company’s conduct in handling a claim for benefits. Bad faith laws apply if ERISA does not, as ERISA supersedes any and all State laws that relate to employee benefit plans, which includes most bad faith laws. Florida’s bad faith law is codified in Section 624.155, Florida Statutes. Florida’s bad faith law allows for the recovery of punitive damages in certain circumstances, and attorney’s fees and court costs. Bad faith insurance claim practices include, but are not limited to: • failing to attempt in good faith to settle a case within the policy limits when liability is reasonably clear; • making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; and • failing to promptly settle claims, when such obligation is reasonably clear in order to influence settlements under other portions of the insurance policy cove
