Has your Insurer acted in Bad Faith?


Insurance companies owe a duty to claimants to act in good faith. These duties include compensating or indemnifying in a timely way and to investigate a claim promptly, fairly, and diligently.

When an insurance company falls short and a court finds that it acted in bad faith, such rulings damage the insurance company’s reputation. It undermines the working relationships with brokers and between consumers of their products.

In Fidler v. Sunlife Assurance Company of Canada (2006), the Supreme Court of Canada clarified that bad faith requires a conscious wrongdoing or “an act of dishonesty operating within an improper or illegal design.” It is important to point out that negligent adjusting of a file does not necessarily lead to a finding of bad faith. However, handling claims incompetently, with no compassion, or behavior that is high-handed or outrageously arrogant or designed to “beat down” the insured may be considered acts of bad faith.

There have been many cases since the Fidler decision that have continued to refine what constitutes bad faith in Canada. However, these cases, even taken as a body of law, do not provide a clearly drawn blueprint of how to establish claims against insurance companies for bad faith. Ultimately, such findings will be established on the unique facts and circumstances of the case before the court.  As set out in Fidler: a court considering whether the duty has been breached must look at the conduct of the insurer throughout the claims process to determine whether considering the circumstances, as they then existed, the insurer acted fairly and promptly in responding to the claim.

If an insurer has acted in bad faith, they should expect to be taken to task. However, if you allege bad faith against an insurance company you must be ready for battle as insurers take such allegations very seriously. If the allegations are proven in court, bad faith awards serve to caution insurance companies from behaving in such ways. If you believe your insurance company has acted in bad faith, contact a lawyer experienced in such cases to determine whether the facts of your case support pursuing a claim in bad faith.

Do you feel your insurer has acted in bad faith? Contact us for a free initial consultation and find out how we can help.


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