Belco Petroleum Corporation v. A.J.G. Oil Rig Inc. - New York Supreme Court, Appellate Div., First Dept (Kupferman J.P. and Wallach, Smith and Rubin JJ.) - 17 January 1991

Whether punitive damages can be awarded against insurer for conduct amounting to unfair claims settlement practice

One of the issues in their appeal was whether punitive damages could be awarded against an insurance company for conduct amounting to an unfair claim settlement practice as defined by Insurance Law section 2601. The term was defined to include certain acts “committed without just cause and performed with such frequency as to indicate a general business practice”, the most extensive of which was “not attempting in good faith to effectuate prompt, fair and equitable settlements of claims submitted in which liability had become reasonably clear”.