Insurance Company Accused of Bad Faith Following Fire Claim

This case involves a fire that resulted in severe damage to the plaintiff’s office in Kentucky. The office was insured by a policy provided by the defendants, which included fire coverage. After the fire and damage that resulted, the office building insurance company indicated that they would only pay for external work, not internal damage. The defendants indicated they also would only repair the building’s exterior and anything that was upgraded by the landlord. It is alleged that the defendants initially indicated full insurance coverage and after this catastrophic event were only willing to fix exterior damage.

Question(s) For Expert Witness

1. Are you familiar with similar bad faith claims?

2. What kind of damage is typically covered after a fire?

Expert Witness Response E-000891

Typically, the insurance coverage provided by the property insurance policy for an office is dictated by the office bylaws. One type of bylaws is "walls in" and the other is "walls out". "Walls in" will include some interior repairs. Walls out, will generally exclude coverage for inside the units. I would also need to know the cause of the fire as the insurance policy should have included both property and liability coverage. If we could possibly take the position that the fire was the fault of the association, I would argue that the association was liable, which would trigger the liability portion of the policy. In any event, the coverage required by the bylaws should have been reviewed by the broker and discussed with the association when coverage was placed. I have consulted on many fire claims and know the proper steps to successfully resolve property claims.