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Bad-faith litigation has long been a contentious — and big-dollar — issue for insurers.

Liberty Mutual ordered to pay $4.5M on a $25,000 policy

A federal district court in Illinois has ordered Liberty Mutual to pay a $4.5 million judgment despite the fact that it didn't find that the insurer had acted in bad faith.

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According to the district court, even absent bad faith, damages for breach of the duty to defend could be in excess of the policy limits and were “measured by the consequences proximately caused by the breach.” (Photo: Shutterstock)

This story is reprinted with permission from FC&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

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