Oklahoma attorneys defending lawsuits brought by policyholders against insurance companies regularly use the defense of forseeability to limit special damages which are claimed in the lawsuit.  Special damages for failure to pay under an insurance policy must be the kind of damages that would ordinarily result from breach of contract.  The concept comes under the rule of law in Hadley v. Baxendale, 9 Exch. 341, 156 Eng. Rep. 145 (1854) which limits damages for breach of contract to losses that were forseeable at the time of contracting.  Oklahoma courts limit damages which are not forseeable.  Coker v. Southwestern Bell Telephone Company, 1978 OK 85, 580 P.2d 151, Missouri Pacific Railroad Company v. Ridley, 1962 OK 277, 383 P.2d 227.

The term “forseeable” is best understood as the consequences one would expect from a certain action.  As an example, a mistake in accidentally denying a $500.00 property damage claim from a fender bender would not forseeably end up with the insured filing for bankruptcy.  On the other hand, refusing to promptly pay a valid business interruption claim could “forseeably” result in a business having to close its doors and shut down.  Experienced attorneys defending litigation in which the insured wants to be paid for things not directly related to the insurance policy will challenge whether the insurer could have anticipated the events.