(USA Herald) – As reporter for the USA Herald, Samuel Lopez delves into the recent developments in the world of insurance bad faith and what it means for insurers. In the case of Security National Ins. Co. v. Construction Associates of Spokane, a Washington federal court found that an insurer had breached its duty to defend a party as an additional insured and that its conduct amounted to bad faith.
The court pointed out that the adjuster had not considered a relatively recent Washington Supreme Court opinion that dictated that a defense was, in fact, owed. In T-Mobile USA, Inc. v. Selective Ins. Co. of Am., the court held that the insurer was bound by the representation of its authorized agent in a Certificate of Insurance that an organization was an additional insured, even though the Certificate said that it could not be used to expand coverage beyond that provided in the insurance policy. Before this decision, case law dictated that a Certificate of Insurance could not expand coverage provided by the insurance policy. The court characterized the overlooked decision as a “blockbuster” for coverage law.