BAD FAITH LITIGATION
Bad faith litigation is a lawsuit brought by one party against another who has violated the covenant of good faith and fair dealing that exists in every contract. The standards of proof differ depending on the status of the Plaintiff. Courts have distinguished between first party claims and third party claims.
A first party claim us a claim by an insured against his or her own insurance company. For example, a fire loss claim against your homeowner policy is a first party claim.
A third party claim is a claim against a policy made by someone other than the named insured. For example, someone who makes a claim for injuries after falling on another party’s land. The person making the claim is not the insures under the policy, the insured is the landowner. Here the injured party is making a claim under the landowner’s policy.
