Ny Court Of Appeals Permits Consequential Damages Against Commercial Property Insurers Found To Have Wrongly Denied Coverage Or Delayed Payment

In a pair of potentially far-reaching decisions, the New York Court of Appeals has confirmed that consequential damages may be sought against a commercial property insurer found to have wrongfully denied coverage or delayed payment. In its rulings, New York State's highest court determined that all contracts with insurers featured a covenant of good faith that, when breached, could give rise to consequential damages. Two dissenting Judges noted that these decisions are simply changing the label of "punitive damages" to "consequential damages," which could result in the punitive punishment of honest insurers. New York law firm Traub Lieberman has published an article on the subject, in which one of its founding partners discusses the potential impact these rulings could have on the property insurance industry. Read »