Making the Decision to Defend
Insurance is considered a quasi-public utility, since modern industry and business could not effectively operate without it. The courts recognize the importance of insurers to the community as a whole and, therefore, find a need to more stringently control the actions of insurers. As illustrated by the decision in Egan v. Mutual of Omaha Insurance Co., 24 Cal. 3d 809, 819, 157 Cal. Rptr. 482 (1979), adjusters must always conduct a thorough investigation of every claim before making a decision to deny, or the insurers will find themselves forced to pay claims that are not covered because a court concludes the insurer acted in bad faith.
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