How does the duty of good faith apply to employers' liability insurance?

The duty of good faith in employers' liability insurance is an essential principle that governs the relationship between the insurer and the insured. This principle mandates that both parties act honestly and fairly towards each other, ensuring that neither party engages in deceptive practices or fails to disclose vital information that could affect the insurance contract.

In the context of employers' liability insurance, the duty of good faith applies equally as it does to non-consumer insurances. This means that employers and insurers are both held to the same standard of good faith conduct, regardless of whether the insurance is for consumers or businesses. This uniformity helps maintain trust in the insurance industry and provides a foundation for resolving disputes, ensuring that claims are handled fairly and in accordance with the terms of the policy.

Understanding this duty is crucial for both employers and insurers, as it influences how claims are managed and how potential disputes may be approached in the context of liability for workplace injuries.