Tuesday, March 22, 2016

The ‘Arguable Basis’ Standard for Expert Testimony

Originally published by Brandee Bower.

Insurance companies often hire experts to assist with claims. If the experts are wrong, is that bad faith?
Mr. Charlie was a yacht out of Alabama insured with Atlantic Specialty Insurance Company. A fire occurred on board, completely damaging the boat and its contents. The insurance company filed a declaratory judgment action with the court since it believed it did not have to cover the loss. Mr. Charlie Adventures asserted counterclaims for breach of contract and bad faith.

The insurance company’s experts concluded that the fire started in the engine compartment due to the seawater intake screen for the starboard strainer being restricted by marine growth. They denied the claim because of a policy exclusion for losses due to “marine life” and for failure to maintain the yacht. Mr. Charlie sought to exclude the alleged experts’ testimony, arguing that the methodology used to determine the cause of the fire was unreliable.1 The trial court agreed. Since the insurance…


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