July 1, 2019
In a case dealing with the very highly charged issue of a bad faith claim against an insurer for failing to settle for the policy limit, the Seventh Circuit, applying Illinois law, determined that this specific insurer did not act in bad faith. The case is Surgery Ctr. At 900 N. Mich. Ave., LLC. V. Am. Physicians Assurance Corp., 922 F.3d 778 (7th Cir. 2019).
The plaintiff-appellants (Surgery Center) is an outpatient surgery center that permits outside physicians to perform surgeries at its facility. The Defendants-appellees, the American Physicians Assurance Corporation, Inc. and American Physicians Capital, Inc. (together, APA) is the medical malpractice company that insured Surgery Center. Surgery Center purchased an insurance policy from APA that limited APA's liability to $1 million per claim. The policy limited APA's liability to $1 million per claim and noted that APA would defend and indemnify Surgery Center for claims that were covered under the policy.