Breaching Insurer's Liability Not Capped, Nev. Justices Say

Law360 (December 14, 2018, 6:12 PM EST) -- The Nevada Supreme Court ruled Thursday that an insurance company that breaches its duty to defend its policyholder can be held liable for “consequential damages” beyond the policy limits even if it didn’t act in bad faith, allowing a traffic accident victim to proceed with his claim that Century Surety Co. must cover an $18 million judgment he obtained against Century’s insured.

Answering a certified question from a Nevada federal court, the state justices refused Century’s call to adopt the majority view taken by courts around the country — that a breaching insurer’s liability is generally capped at its policy limits,...

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