Jury Awards Company $5.3 Million in Bad Faith Insurance Damages to Company
Recently, a jury based in Tarrant County, Texas awarded a fracking company more than $5 million in damages in a bad faith insurance claim.
Oklahoma City, OK -- (ReleaseWire) -- 09/12/2019 --In Compass Well Services, LLC v. Great American Insurance Company of New York, the jury determined that the insurance company engaged in unfair settlement practices when handling an equipment damage claim.
A Contractor Error Caused Significant Equipment Damage
The underlying incident that was at dispute in this case occurred in 2013. It was at that time that an outside contractor made a serious error at a worksite. Specifically, a contractor improperly closed a valve causing a significant pressure buildup that damaged a large amount of equipment and led to a three-day cessation of all operations. Compass Well Services suffered considerable financial losses as a result of the pressure buildup. Soon after, the company filed a $1.5 million claim against its insurance policy — which was offered by Great American Insurance company — seeking coverage for the cost to repair and replace the affected equipment.
Great American Insurance Company Denied Coverage
After reviewing the claim. Great American Insurance Company denied coverage. Specifically, the insurance company stated that Compass Well Services improperly disposed of the damaged equipment before a full investigation could be conducted. Even after the fracking company produced supplemental information, the insurance company declined to reconsider its decision.
Insurers Must Use Good Faith Settlement Practices
Eventually, the insurance dispute went to a jury trial. After assessing all testimony and evidence, the jury determined that the Great American Insurance Company failed to use good faith settlement practices. As explained by the Oklahoma City bad faith insurance claims attorneys at Brown & Gould, PLLC, "Insurance companies have a legal duty to handle claims in a good faith manner. Among other things, this duty requires insurers to conduct a full and fair investigation, to affirm or reject the claim within a reasonable time frame, and attempt to reach a prompt and fair settlement when liability is clear."
Bad Faith Damages Were Awarded
Bad faith insurance claims are brought under state law. In most jurisdictions, including in Oklahoma and Texas, policyholders are entitled to seek additional compensation if their claim is deemed to have been denied or underpaid in bad faith. Under Section 541.152 of the Texas Insurance Code, plaintiffs in a bad faith claims may recover compensation for the full value of their covered losses, treble bad faith damages, and attorneys' fees. In this case, Compass Well Services was awarded $2 million in bad faith damages and more than $950,000 in court costs and attorneys' fees.
Media Relations Contact
Brown & Gould PLLC
View this press release online at: http://rwire.com/1259545