Defendant insurance company delays payment on a valid claim. Jury verdict for over $5 million.
Lost Profit: $1,376,498
Attorneys Fees: $160,000
Defendant Peerless Insurance Company sold an insurance policy to Plaintiff Palm Springs Pump to insure a drill rig used to drill water wells. This was one of several policies plaintiff purchased from defendant.
On December 9, 2010 the drill rig was damaged in an accident. Plaintiff made a claim to Peerless for insurance benefits under the policy. Plaintiff lost the use of the drill rig and the company suffered lost profits as they waited over six months.
Defendant had an answer as to the cause of the failure and that it was a covered loss approximately one month after the claim was made. They spent the next several months delaying payment on the claim and hiring additional experts who made the same determination as the first expert back when the claim was filed.
Even after they accepted coverage 6-7 months after the claim (all the while fully aware that the company was losing money drastically as days went by - but there was no concern about this since Peerless was not liable for business interruption coverage), it took another few months to actually make full payment on the claim.
The amount paid on the underlying policy was $490,000.
That defendant insurance company unreasonably and in bad faith delayed and mishandled the claim, hired biased experts, hid relevant evidence and acted with malice and oppression in delaying payment for over six months.
That it handled the claim appropriately and paid plaintiff company all the benefits that were owed.