Claim File ‘Exhibit A‘ in Bad Faith Litigation

Avoidance of bad faith claims is, as a practical matter, impossible. Because there is an almost infinite spectrum of potential bad faith theories, every claim is susceptible to becoming a bad faith claim, with the attendant extra-contractual and punitive damages exposures. However, many bad faith actions are filed initially for the purpose of obtaining discovery of the claim file, and only after the claim file is produced is a decision made by the plaintiff whether to aggressively pursue the bad faith claim. Although it is impossible for an insurer to prevent bad faith claims from being filed, by creating a defensible claim file during the claims process it is possible to discourage aggressive prosecution of such claims and to prevent such claims from reaching a jury.