A Video Explaining Ethics and the Covenant of Good Faith & Fair Dealing
On rare occasions, an insured will act unethically in his, her or its relations with an insurer. When they do, if discovered by the insurer or its claims person, the right to indemnity may be lost. As you read about the decision from the United States Supreme Court below consider how the insured acted unethically to the insurer and why the Supreme Court decided to deprive the insured of his right to indemnity. Although hoary with age this case still states the law of the United States with regard to unethical and fraudulent conduct by an insured and the insured’s obligation to appear for and testify honestly at an examination under oath. The full text of the U.S. Supreme Court decision in Claflin & Others v. Commonwealth Insurance Company.; Same v. Western Assurance Company.; Same v. Franklin Insurance Company, Supreme Court Of The United States 110 U.S. 81; 3 S. Ct. 507; 28 L. Ed. 76; 1884 U.S. LEXIS 1661 Argued and submitted October 16, December 17, 1883. January 14, 1884, dealing with an unethical insured is in Appendix 1. The decision resulted after a man named Murphy, acting as the insured, lied at an Examination Under Oath because he was concerned others might learn of information that could hurt him with regard to his relationship to his employer and a lender. The lie was a breach of Murphy’s ethical obligation to the insurer and he was deprived of indemnity because what he did was fraud. © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4