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39 Tort Trial & Ins. Prac. L.J. 1 (2003-2004)
Bad Insurance Bad Faith Law

handle is hein.journals/ttip39 and id is 11 raw text is: BAD INSURANCE BAD FAITH LAW Douglas R. Richmond Despite predictions ten years ago that bad faith actions, with their potential for unjustified jury verdicts and excessive punitive damages, were, if not on the wane, then at least leveling off, such perils continue to threaten insurers. Analytical error and faulty reasoning bedevil this area of the law. This article provides an overview of insurance bad faith law as it now exists, and then discusses in detail three subareas of bad faith law that are of particular concern: bad faith in the absence of coverage, insurers asfidu- ciaries for their insureds, and so-called continuing bad faith. It may be, the author says, that bad faith insurance law has matured, but it has done so in some ways that are not entirely benign. This is, in short, bad insurance bad faith law. I. INTRODUCTION Professor Kenneth S. Abraham of the University of Virginia, a preeminent insurance law scholar, observed roughly a decade ago that bad faith activ- ity has leveled off and that liability for bad faith is no longer quite the dramatic threat to insurers, nor for most plaintiffs the potential pot of gold at the end of the rainbow, that it may once have seemed to be.' In Professor Abraham's view, by 1994 insurance bad faith law had reached maturity.2 Contrary to Professor Abraham's observations, bad faith liability remains a dramatic threat to insurers. In April 2003, for example, an Arizona jury 1. Kenneth S. Abraham, The Natural History of the Insurer's Liability for Bad Faith, 72 Tx. L. Risv. 1295, 1295 (1994). 2. Id. at 1296. Douglas R. Richmond (drichmond@armstrongteasdale.com) is a partner with Arm- strong Teasdale, LLP, in Kansas City, Missouri. This article uses the pronoun he for simplicity's sake; it does not evidence gender bias. The views expressed in this article are those of the author and not necessarily the opinion of his firm or its clients.