Insurance Law

Bad Faith Settlement a Pa. Record

An insurance company has agreed to pay $20 million to settle a suit claiming it acted in bad faith when it refused to settle a claim within the policy limit.

The settlement is the largest to date in a Pennsylvania bad-faith insurance case, the Legal Intelligencer reports.

Princeton Insurance Co. had refused to pay its policy limit of $1 million to settle a dram shop case against its insured, the Ivyland Cafe. A jury later awarded $75 million to a highway construction worker left quadriplegic after he was struck by a drunk driver, a manager at the bar who had served himself alcohol. A judge later cut the award in half.

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