In a decision out of the U.S. District Court for the Eastern District of Washington, the court found that an insurer acted in bad faith when a claim was denied based on the adjuster's lack of knowledge of recent Washington case law. The case is Sec. Nat'l Ins. Co., v. Constr. Assocs. of Spokane, No. 2:20-cv-00167-SMJ, 2022 U.S. Dist. LEXIS 53533 (E.D. Wash. Mar. 24, 2022).

Construction Associates of Spokane was a general contractor hired for a project at the Paulsen Center in Spokane. Construction Associates hired a subcontractor, Merit Electric, for whom Mark Wilson worked. In 2016, Wilson was seriously injured while working at the Paulsen Center. Three years later, he sued Construction Associates and other defendants in Spokane County Superior Court, claiming damages for medical expenses, pain and suffering, mental anguish and emotional distress, loss of enjoyment of life, loss of wages and loss of consortium.

Construction Associates tendered to Merit Electric's broker, Alliant Insurance Services, Inc. Alliant forwarded the tender to Security National, including a certificate of insurance issued by Alliant to Construction Associates on September 3, 2019, and the subcontract with Merit. The subcontract required Merit to maintain CGL coverage with $1 million limits. The subcontractor was required to submit the certificate of insurance to the Contractor.