Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Senate Bill Would Create Private Cause of Action in New Jersey for Bad Faith Insurance Claims
Author: Scarinci Hollenbeck, LLC
Date: February 4, 2013
Key Contacts
Back
Legislative efforts are again underway in New Jersey to establish a private cause of action for bad faith claims against insurers. This would help to codify bad faith doctrine recognized in Rova Farms Resort Inc. v. Investors Ins. Co., 65 N.J. 474 (1974) and in other decisions.
Under current law, the Commissioner of Banking and Insurance can file a civil action to enforce violations of New Jersey’s laws regarding unfair claim settlement practices.
The “Consumer Protection Act of 2012″ (S-2460) sets forth an additional private cause of action for individual insureds and their assignees regarding unfair practices in the settlement or attempted settlement of insurance claims made on their property and casualty insurance policies.
Under the bill, individual plaintiffs would not be required to show that the alleged violation occurs “with enough frequency as to indicate a general business practice.”
A successful claimant would be entitled to:
- The full amount of damages as set forth in the final judgment, regardless of the coverage limits of the policy;
- Prejudgment interest, reasonable attorney’s fees, and all reasonable litigation expenses from the date of the institution of the action filed pursuant to the provisions of this bill. The prejudgment interest shall be calculated at the rate provided for tort actions, or for non-acceptance of a formal offer for judgment, whichever is higher, as prescribed in the Rules of Court; and
- Punitive damages, when the insurer’s acts or omissions demonstrate, by clear and convincing evidence, actual malice or wanton and willful disregard of any person who foreseeably might be harmed by the insurer’s acts or omissions.
Similar legislation has been introduced in the state Assembly. Although prior efforts to create a private cause of action have failed, some observers believe the latest proposals may have a better chance of succeeding in light of concerns expressed in regard to carriers’ adjustments of Superstorm Sandy claims.
If you have any questions about the proposed legislation or would like to discuss how it may impact your business, please contact me, Charles Yuen, or the Scarinci Hollenbeck attorney with whom you wor
- Practices: Corporate Transactions & Business, Commercial Litigation - Business Litigation Attorney
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.