Bad faith can result in Oklahoma from failing to obtain a legal opinion before denying coverage. In Harrell v. Old American Ins. Co., 1991 OK CIV APP 91, 829 P.2d 75, a claims examiner failed to seek legal advice regarding a coverage question before denying payment. The Oklahoma Court of Appeals said it was reasonable to infer the lack of a legal opinion was either because the examiner knew there was coverage or she did not want confirmation the claim was not properly excluded under the terms and conditions of the policy. The Court determined the trial court was justified in submitting the issue of punitive damages to the jury.
Some advantages to obtaining a legal opinion as to whether coverage exists before issuing a denial are:
- demonstrates good faith on the part of the insurer
- having an objective, third person gives a different perspective
- qualified, competent Oklahoma attorneys give insight into the law
- the cost for a legal opinion is substantially less than a bad faith award