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Insurers May be Liable for Foreseeable Consequences if there is a Breach of the Covenant of Good Faith and Fair Dealing.

AndyMilana

October 31, 2016 at 6:06:11 PM

In <a href="http://www.nycourts.gov/reporter/3dseries/2016/2016_06951.htm"><em>Mano Enterprises, Inc. v. Metropolitan Life Insurance Company</em></a>, plaintiff attempted to assign its policy to a third-party.  The insurance company then placed a hold on the policy that resulted in a lapse of the policy due to non-payment of premium.  The Court held that there were issues of fact as to whether the insurance company appropriately refused to process the assignment of the policy by the plaintiff, and any damages for the foreseeable consequences.
Insurers should remain cognizant of potential liability incurred in the event that policy determinations effect contractual obligations.
Thanks to Valerie Prizimenter for her contribution to this post.
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