Damages Beyond the Policy Limits

Prior to the recent pronouncement by the Court of Appeals in Bi-Economy and Panasia, New York law was somewhat unsettled regarding whether a policyholder was entitled to recover damages in excess of the stated limits of the policy. But, for the first time, in Bi-Economy and Panasia, the New York Court of Appeals recognized the viability of policyholders' claims for consequential damages in excess of the stated limits of the insurance policy. And while New York has historically been viewed by some as a less progressive jurisdiction for policyholders, several
New York decisions, including, the Appellate Division, First Department's, decision in Acquista v. New York Life Insurance Co., 730 N.Y.S.2d 272 (App. Div. 1st Dep't 2001), and Eurospark Industries, Inc. v. Massachusetts Bay Insur- ance Co. (In re Eurospark Industries, Inc.) 288 B.R. 177 (Bankr. E.D.N.Y. 2003), set the stage for the Court of Appeals' decisions in Bi-Economy and Panasia. Taken together, Acquista, Eurospark, Bi-Economy, and Panasia offer important lessons on how policyholders should plead their cases against recalcitrant insurance companies and should go a long way toward changing the manner in which insurance companies respond to their policyholders in New York.