Jurisdiction(s):
United Kingdom

United States insurance bad faith litigation: standards, common grounds, defences, procedure, discovery and damages

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

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Insurance agreements, like any contract, carry an implied obligation that the parties act with good faith and fair dealing towards one another. This principle has prompted courts and legislatures to develop standards that define the specific duties insurers owe to policyholders. The resulting legal framework enables policyholders, in prescribed circumstances, to seek recovery from insurers for ‘bad faith’. This Practice Note identifies common bases for insurance bad faith claims and addresses litigation issues, including:

Jurisdiction-specific bad faith standards
Insurer defences
Discovery points
Considerations regarding available types of damages

For additional guidance on insurance bad faith claims, see Practice Note: US—insurance bad faith claims.

Bad faith generally

Contracts typically imply a duty of good faith and fair dealing, requiring each party not to act in a way that harms the other party’s right to the benefit of the agreement. In the insurance context, jurisdiction-specific common law and statutory law have evolved to ensure insurers do not breach this duty by acting in bad faith. Case law from various states sets out these general principles. For example, the Court of Appeals of Colorado has stated succinctly that...

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Web page updated on 22/05/2026

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