In: Accounting
Leo and Mary Deters owned Deters Tower Service, Inc., in Iowa. Deters Tower serviced television and radio towers and antennas in a multistate area. The firm obtained a commercial general liability policy issued by USF Insurance Co. to provide coverage for its officers, including Leo. One afternoon, Leo and two Deters Tower employees were working on a TV tower in Council Bluffs when they fell from the tower to their deaths. The workers’ families filed a negligence suit against Leo’s estate. USF refused to defend the Deters estate against the suit and pay any resulting claim but did not provide a reason for its refusal. Is USF liable to the Deters estate for this refusal? If so, on what basis might the Deters estate recover, and how much? [Deters v. USF Insurance Co., 797 N.W.2d 621 (Iowa App. 2011)] (See The Insurance Contract.)
USF is liable to the Deters estate for refusal to defend the deter estate against the suit and pay any resulting claim as it will be considered as “bad faith Action” as per Law.
According to the bad faith action Deter estate can recover:-