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Articles

New York Courts Support Bad Faith Claims Where Insurance Companies Unreasonably Delay and Deny Claims

New York Law Journal

  • Published On: June 26, 2024

On May 29, 2024, the Northern District of New York upheld insurance policyholders’ right to pursue bad faith claims and consequential damages when an insurance company unreasonably delays and denies claims. In PAR Technology Corp. v. Travelers Property Casualty Co. of America, No. 6:22-cv-1121, 2024 WL 2747823, Chief District Judge Brenda K. Sannes denied Travelers Indemnity Company’s (Travelers) pre-answer partial motion to dismiss plaintiff PAR Technology Corporation’s (PAR) action alleging claims for breach of contract, bad faith, and violation of New York General Business Law (GBL) §349.

Sannes ruled that PAR’s complaint clearly delineated consequential damages that were not duplicative of alleged breach of contract damages, and that PAR properly pleaded consumer-oriented conduct that violated GBL §349.

From 2013 to 2019, Travelers issued a series of one-year insurance policies to PAR, each of which provided that Travelers would defend PAR and pay damages in suits related to “personal and advertising injuries.”

In 2019, PAR was sued in the Northern District of Illinois for alleged violations of the Illinois Biometric Information Privacy Act (BIPA). PAR ultimately settled the matter for $790,000, but before settlement, PAR notified Travelers of the pending suit and requested coverage pursuant to its insurance policies. 

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Cort T. Malone is a shareholder in the New York office of Anderson Kill P.C. and chair of the firm’s Biometric Liability Insurance Recovery Group.

Kathleen Gatti is a summer associate at the firm and a third-year law student at St. John’s University School of Law

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