Quote of the Day - What the insurance companies have done is to reverse the business so that the public at large insures the insurance companies.
It took the court 67 pages to get to it, but it held Century Surety Company liable for bad faith for failure to defend and indemnify its insureds against a claim from a defective glass installation for an underground viewing chamber. Just over $2.5 million for a $56,000 installation of glass panels in an underground stream viewing chamber. How did it get so out of hand?
You'd have to ask the insurance company. It issued an insurance policy naming the spouse of the insured, but when she got sued over the defective installation, the insurance company balked. It also balked when the insured submitted the claim against the glass installer, but ultimately stepped in. Sort of.
Sure, the beginning of the case reads like a Three Stooges episode: everything that could go wrong for the subcontractor did go wrong. He didn't install a sealant between the window and the frame, and got into a dispute whether the contract required it. Then it rained, flooding the underground chamber and causing solvents to come into contact with the glass, ruining the glass, which was then rejected by the customer building the underground viewing chamber, the US Forest Service.
Then the insurance company got involved, and it went downhill, so to speak, from there. Fiasco after fiasco led to the subcontractor's downfall, each time exacerbated by inaction or wrong action on the insurance company's part. The saddest part of this whole situation is that the claim started in 1997, and it was resolved nine years and $2.5 million later.
This case should become required reading for insurance company adjusters and coverage counsel. They really wouldn't have to read past the first eighteen pages to get the picture.