Adjuster Bad Faith Penalties & Legal Liability

States and courts across the country continue to evaluate the role independent adjusters play in the claims handling process ­– particularly surrounding issues of third party liability­ – and how this is often distinct from the responsibilities of public adjusters and other entities that represent the claimant.

ACP is committed to educating all stakeholders on these important issues, and to continue to advocate for independent adjusters on liability and bad faith matters.

Recent State Liability And Bad Faith Activity

New Jersey ­– Hankins v. Philadelphia Contributorship: A recent decision by the United States District Court for New Jersey ruled an independent adjuster could be held liable for negligent failure to warn in a case where a property owner was injured because of a condition on his property that was the subject of a claim that had been inspected by an adjuster. The court’s opinion imposed a limited “duty of care” in this case misconstrued the nature of what an independent claims adjuster is, and for whom the adjuster works.

In May 2020, ACP filed an amicus brief to the New Jersey District Court outlining the distinction between independent and public adjusters – only the latter of which, as representatives of the claimant, should be subject to the duty of care standard.  Further, the brief argued why the imposition of a limited duty of care standard on responding field claims adjusters is not only contrary to public policy but would also have severely negative consequences on the adjusting industry and ultimately lead to higher premiums and weaker consumer protections.