I’m just back from Orlando where I had the opportunity to speak at an ABA conference on business interruption insurance.  During the talk, I referred to a case I often cite, Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565, 1986 Ariz. LEXIS 253 (1986).  For me, the key quote from the case is:

“In delineating the benefits which flow from an insurance contract relationship we must recognize that in buying insurance an insured usually does not seek to realize a commercial advantage but, instead, seeks protection and security from economic catastrophe…Thus, the insurance contract and the relationship it creates contain more than the company’s bare promise to pay certain claims when forced to do so; implicit in the contract and the relationship is the insurer’s obligation to play fairly with its insured.”

That quote crystallizes the insurance relationship, doesn’t it?  When the policyholder overreaches and tries to realize a commercial advantage through insurance, the policyholder gets into trouble.  Conversely, when the carrier forgets the purpose of insurance and starts viewing the claims department as a profit center, the insurance company gets into trouble.