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The New York Court of Appeals denied an insurance company’s motion for reargument of a decision that affirmed a key principle of the insurance contract on June 6, reaffirming a decision delivered on February 19, 2008. The Court of Appeals upheld the lower court’s decision in Bi-Economy Market, Inc. v. Harleysville Insurance Company of New York, et al., which held that policyholders can seek consequential damages if their business collapses as a result of the insurance company’s failure to fulfill its contractual obligations.

The Court of Appeals held that “it is well settled that in breach of contract actions ‘the nonbreaching party may recover general damages which are the natural and probable consequence of the breach’” and that “when an insured…suffers additional damages as a result of an insurer’s excessive delay or improper denial, the insurance company should stand liable for these damages.”

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