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Insurer's bad-faith conduct spotlighted in malpractice lawsuit

And it is certainly notable -- especially for victims who must routinely square off against individuals and institutions making all efforts to shield themselves from liability -- that multiple defendants can be targeted in medical malpractice litigation. Doctors are often culpable in a fundamental sense, of course, but in many instances so are anesthesiologists, nurses, lab technicians or other medical professionals.

There is an additional party that is occasionally placed front and center in a medical malpractice lawsuit for conduct alleged to be wrongful and even wanton, namely, an insurance company.

A national news story spotlights the bad-faith behavior of one large malpractice insurer in a recently concluded malpractice trial in Chicago. That case featured the parents of a newborn who suffered from oxygen deprivation during birth and was born with a brain injury that subsequently proved to be fatal.

The insurer was not an original defendant in underlying litigation focused upon a team of obstetricians. That case resulted in a money judgment against those defendants.

Subsequently, though, the parents of the deceased child filed a bad-faith lawsuit against the insurer -- ISMIE Mutual Insurance -- for its failure to pursue settlement negotiations in good faith when it reasonably knew that a damage award against the obstetricians might exceed the limits of their malpractice coverage. Failure to do so put the doctors at risk.

Allegedly, ISMIE purposefully misled its clients both about the amount of coverage available to settle a claim and an offer made by the plaintiffs that was arguably in the physicians' best interests.

It took a jury less than one hour in deliberations earlier this month with ISMIE being slapped with a $14.3 million judgment. Of that amount, $13 million was levied as punitive damages for the insurer's bad-faith conduct.

And it is certainly notable -- especially for victims who must routinely square off against individuals and institutions making all efforts to shield themselves from liability -- that multiple defendants can be targeted in medical malpractice litigation. Doctors are often culpable in a fundamental sense, of course, but in many instances so are anesthesiologists, nurses, lab technicians or other medical professionals.

There is an additional party that is occasionally placed front and center in a medical malpractice lawsuit for conduct alleged to be wrongful and even wanton, namely, an insurance company.

A news story from the Chicago Tribune spotlighted the bad faith behavior of one large malpractice insurer in a recently concluded malpractice trial in Chicago. That case featured the parents of a newborn who suffered from oxygen deprivation during birth and was born with a brain injury that subsequently proved to be fatal.

The insurer was not an original defendant in underlying litigation focused upon a team of obstetricians. That case resulted in a money judgment against those defendants.

Subsequently, though, the parents of the deceased child filed a bad-faith lawsuit against the insurer -- ISMIE Mutual Insurance -- for its failure to pursue settlement negotiations in good faith when it reasonably knew that a damage award against the obstetricians might exceed the limits of their malpractice coverage. Failure to do so put the doctors at risk.

Allegedly, ISMIE purposefully misled its clients both about the amount of coverage available to settle a claim and an offer made by the plaintiffs that was arguably in the physicians' best interests.

It took a jury less than one hour in deliberations earlier this month with ISMIE being slapped with a $14.3 million judgment. Of that amount, $13 million was levied as punitive damages for the insurer's bad-faith conduct.

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