Insurer Cannot Escape Massage Therapist’s Coverage Obligations, Court Rules
November 3, 2025 | JacobiJournal.com — A recent court decision has reaffirmed that insurer coverage obligations cannot be ignored or withdrawn simply because a carrier abandons a related legal pursuit.The ruling involved a massage therapist who sought defense and indemnity under her professional-liability policy after being accused of misconduct during a client session. Court Says Contract Obligations Remain Intact The insurer argued that because it had discontinued a subrogation claim connected to the incident, it was no longer obligated to cover the therapist’s defense or potential settlement costs. The court rejected that argument, underscoring the insurer coverage obligations that remain once a claim is triggered. In its written opinion, the judge emphasized that contractual coverage cannot “evaporate at the convenience of the insurer.” Once a policyholder has reported a covered event and met the terms of notice and cooperation, the insurer’s duty to evaluate and respond remains enforceable until formally resolved under the policy. Case Highlights Key Lessons for Professional Liability Policies This decision offers a timely reminder that insurer coverage obligations extend beyond litigation strategy, reinforcing the permanence of professional-liability protection for practitioners. For small business owners and independent professionals—such as massage therapists, chiropractors, and wellness practitioners—the judgment reinforces that coverage protections endure unless specifically terminated in writing and consistent with state insurance law. Legal analysts note that the ruling may deter insurers from using procedural maneuvers to avoid paying legitimate claims, especially when policyholders depend on professional-liability coverage to stay in business. Industry Implications Experts say the decision will likely influence how carriers interpret insurer coverage obligations in future cases involving wellness and healthcare professionals. “The court is sending a clear message—once a risk is underwritten, you can’t selectively abandon coverage because litigation strategy changes,” said an insurance law consultant following the case. The case could also prompt insurers to tighten subrogation clauses or modify language around continuing obligations after legal actions are dropped. Broader Legal Context Across the U.S., courts have increasingly emphasized insurer accountability in professional-liability disputes. This mirrors recent trends in healthcare, beauty, and wellness sectors, where practitioners often rely on hybrid business-owner and malpractice policies that contain overlapping clauses. Policyholders are advised to keep written documentation of all communications with insurers and ensure that coverage denials are backed by explicit contractual authority. For more background on how professional-liability coverage operates, visit the National Association of Insurance Commissioners (NAIC). FAQs: About Massage Therapist Insurance Coverage Why was the insurer denying coverage? The company argued that its withdrawal from a subrogation claim ended its duty to cover the massage therapist’s defense costs. The court disagreed, citing the ongoing contractual obligation under the policy. What did the court ultimately decide? The judge ruled that coverage obligations cannot be undone simply because an insurer abandons a related lawsuit. The insurer must still honor its policy duties. What does this ruling mean for insurer coverage obligations? It clarifies that insurer coverage obligations persist even when a related subrogation or legal action is dropped, protecting policyholders under active liability coverage. Could insurers appeal or change their policies after this decision? Yes. While appeals are possible, insurers may instead revise policy wording to clarify post-litigation terms related to insurer coverage obligations and reduce ambiguity in future claims. Subscribe to JacobiJournal.com for the latest coverage of insurance rulings, healthcare liability cases, and professional-risk litigation shaping state and federal precedent. 🔎 Read More from JacobiJournal.com:
GEICO Faces Lawsuit for Failing to Arbitrate Auto Accident Claim
October 22, 2025 | JacobiJournal.com — A new lawsuit filed against Geico Insurance Co. accuses the carrier of failing to engage in mandatory arbitration over a disputed auto accident claim — a move that could expose the insurer to allegations of bad-faith handling and breach of contract. The policyholder claims Geico refused to participate in arbitration proceedings required under the policy’s uninsured/underinsured motorist (UM/UIM) provisions. The suit argues this refusal caused financial and procedural harm, forcing the claimant to pursue damages through litigation instead of arbitration. Policyholder Says Geico Ignored Arbitration Obligation According to the complaint, Geico allegedly failed to respond to multiple arbitration requests after the insured sought compensation for injuries and property loss from an underinsured driver. The claimant contends that arbitration was explicitly required under the contract’s dispute-resolution clause. Legal experts say this case highlights how procedural lapses in arbitration compliance can expose insurers to extra-contractual liability, especially if courts find the insurer acted unreasonably or in bad faith. Potential Exposure for Insurer Compliance Failures Analysts note that arbitration disputes are increasingly common as insurers face growing backlogs in claim resolutions and pressure from policyholders to honor contractually mandated procedures. If the court finds that Geico deliberately avoided arbitration, the insurer could face penalties, including statutory interest, attorney’s fees, and punitive damages. “This kind of claim tests the boundaries of insurer obligations under arbitration clauses,” said a policy litigation attorney. “Courts generally enforce arbitration rights strictly—ignoring them can backfire.” Broader Industry Implications The lawsuit could influence how insurers handle arbitration provisions nationwide. Many state insurance codes and consumer-protection statutes require carriers to act in good faith when processing claims, including adhering to dispute-resolution timelines. Industry observers expect the case to prompt internal compliance reviews within major auto insurers to ensure adherence to both policy language and arbitration laws. For more on arbitration obligations under insurance law, visit the American Bar Association’s Insurance Law Section. FAQs: Geico Arbitration Lawsuit Over Auto Claim 2025 What is the Geico arbitration lawsuit about? A policyholder alleges that Geico failed to participate in mandatory arbitration for a disputed auto accident claim under their insurance contract. Why is arbitration important in insurance disputes? Arbitration clauses streamline claim resolution and reduce litigation costs. Ignoring these provisions can expose insurers to breach-of-contract claims. What legal risks does Geico face in this case? If found liable, Geico could face bad-faith penalties, attorney’s fees, and damages for refusing to comply with arbitration requirements. How might this case affect the insurance industry? It could prompt stricter enforcement of arbitration clauses and internal compliance reviews among national insurers. Stay current on insurer litigation, coverage disputes, and arbitration trends — subscribe to JacobiJournal.com for weekly expert updates. 🔎 Read More from JacobiJournal.com:
Ameritas Urges Georgia Supreme Court To Void ‘Life Wager’ Policy
September 15, 2025 | JacobiJournal.com — Ameritas Life Insurance Corp. is pressing the Supreme Court of Georgia to rule that a controversial life insurance arrangement cannot be enforced, arguing the deal amounts to an illegal wager on human life. At the center of the dispute is an investor-backed life insurance policy that was later purchased by a trust, raising the question of whether such agreements violate Georgia’s long-standing prohibition on wagering contracts. Ameritas contends that allowing the trust to collect benefits would effectively transform life insurance into a speculative investment vehicle, undermining its intended role of providing financial security to families and policyholders. The case highlights broader concerns within the insurance industry about so-called “stranger-originated life insurance” (STOLI) policies, which regulators and courts nationwide have increasingly scrutinized for potential fraud and abuse. Insurer Challenges Investor-Backed Policy Ameritas contends that a trust holding the policy—purchased years after it was originally issued—has no legitimate right to collect death benefits. According to the insurer, such investor-driven transactions undermine the very purpose of life insurance, which is to provide financial security for families, not serve as a speculative investment vehicle. The company argues that allowing investors to profit from policies they never had an insurable interest in could open the door to widespread abuse of the insurance system. Regulators and industry groups have long warned that such practices distort the risk pool, drive up costs for legitimate policyholders, and erode public confidence in life insurance as a safety net. Ameritas maintains that if courts uphold these investor-backed arrangements, insurers may be forced to reevaluate underwriting practices and tighten compliance oversight to prevent similar disputes in the future. Stakes High for Life Settlement Industry The case is being closely watched in Georgia and beyond, as it could influence how courts treat investor-backed life settlement agreements. Industry experts warn that a ruling in favor of Ameritas could set a precedent that reshapes the market for secondary life insurance transactions. Legal observers note that these types of arrangements fall into the broader category of “stranger-originated life insurance” (STOLI), where third-party investors acquire policies with no insurable interest in the original policyholder. Courts across the country have wrestled with whether such contracts violate public policy by creating financial incentives tied to another person’s death. Ameritas argues that Georgia law, like many states, was designed to prevent such speculative practices, and the outcome of this case could set a pivotal precedent for how investor-backed life insurance is treated going forward. Broader National Trend Similar disputes have surfaced across the U.S., with insurers frequently challenging so-called “stranger-originated life insurance” (STOLI) policies. Courts have increasingly scrutinized these arrangements, questioning whether they violate long-standing public policy against wagering on human lives. In several states, high-profile rulings have either voided STOLI contracts outright or limited investors’ ability to enforce them, signaling a judicial shift toward stricter oversight. Regulators have also expressed concern that such practices could distort the life insurance market, inflating costs for policyholders who purchase coverage for legitimate family protection. Industry experts warn that unless clearer legal boundaries are established, these disputes will continue to surface, creating uncertainty for insurers, investors, and beneficiaries alike. What Comes Next in Georgia The Georgia Supreme Court’s decision will determine whether the trust may claim the policy’s benefits, or if the contract will be declared void as against public policy. A ruling is expected later this year and could have ripple effects for insurers, investors, and estate planners across the Southeast. Legal analysts note that the case could set a binding precedent in Georgia, influencing how courts in neighboring states approach similar investor-backed policies. A decision striking down the arrangement could embolden insurers to more aggressively challenge questionable policies, while a ruling in favor of the trust might encourage continued use of such structures in estate planning and investment circles. Either outcome is expected to draw close attention from financial advisors, policyholders, and lawmakers monitoring the balance between consumer protection and investment innovation in the life insurance market. For more context on life settlement regulation, visit National Association of Insurance Commissioners. FAQs: Ameritas Life Insurance Policy Georgia Ruling What is the core issue in the Ameritas case? Ameritas argues that the investor-backed life insurance policy is an illegal “wager on life” and should not be enforced. What is a STOLI policy? A STOLI, or stranger-originated life insurance policy, involves investors purchasing life insurance on strangers, often raising public policy concerns. Why does this case matter beyond Georgia? The ruling could influence national treatment of investor-backed life settlements, shaping future litigation and regulatory approaches. When is a decision expected? The Georgia Supreme Court is reviewing arguments now, with a ruling anticipated before the end of 2025. Subscribe to JacobiJournal.com for timely updates on insurance litigation and financial fraud cases. 🔎 Read More from JacobiJournal.com:
Appeals Court Revives Insurance Bad Faith Case in $7.5M Verdict
August 27, 2025 | JacobiJournal.com – The 1st U.S. Circuit Court of Appeals has revived a Massachusetts case alleging insurance bad faith after a food service distributor’s insurer failed to propose a fair settlement. The ruling stems from plaintiff Paula Appleton’s $7.5 million jury verdict following a collision with a company truck. Court records revealed that internal reports from AIG Claims, on behalf of National Union Fire Insurance, estimated damages between $6.5 million and $8.9 million more than a year before trial. Despite these assessments, the insurer refused to raise its $2.65 million offer. Court’s Reasoning on Insurance Bad Faith The appeals court held that under Massachusetts law, insurers must make good-faith settlement efforts when damages are “reasonably clear.” The refusal to increase an offer in line with internal evaluations can constitute insurance bad faith, even if the final amount is disputed. The decision reinforces that insurers who disregard their own evidence of liability and damages risk exposure to significant legal consequences. Broader Implications for Policyholders This ruling underscores the legal obligation of insurers to protect policyholders by pursuing fair settlement practices. For victims, it highlights the importance of challenging settlement delays or undervaluation, particularly in cases involving catastrophic injuries. For comprehensive insight into what constitutes bad faith in Massachusetts and how the law protects policyholders, check out this excellent breakdown in the Boston Bar Journal on enforcing the implied covenant of good faith under G.L. Chapter 176D(9)(f). FAQs: Insurance Bad Faith Case Details What does insurance bad faith mean in Massachusetts law? Insurance bad faith occurs when an insurer fails to make a fair settlement offer even when damages and liability are reasonably clear. Why did the appeals court revive the case? The court ruled the insurer may have acted in bad faith by refusing to increase its offer despite internal reports showing damages were far higher. How much was the original verdict tied to this insurance bad faith dispute? The plaintiff, Paula Appleton, secured a $7.5 million jury verdict in state court before the appeal. What are the broader implications of this ruling? The decision highlights insurers’ legal duty to protect policyholders and ensure good-faith settlement practices. Stay informed on insurance litigation and fraud cases. Subscribe to JacobiJournal.com for the latest legal news and expert analysis. 🔎 Read More from JacobiJournal.com: