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Reade Insurance Company Sues Liberty Mutual Regarding Bad Faith Insurance



A Manufacturing Company has sued the Liberty Mutual Fire Insurance Company for bad faith insurance pertaining to a denied policy coverage. The claimants believe that Liberty Mutual’s insured caused a deadly explosion in Idaho - where three claimants allege that the company acted with negligence regarding the purification and transportation of a magnesium solution to be destroyed.

US Ecology Inc., the contracted company to destroy the materials, say that Reade's solution contained other, non-magnesium materials that caused an explosion at their facility. Once US Ecology Inc. drained the barrels and prepared for destruction, one of their employees entered the solution pit and was killed in an explosion. There was also significant property damage.

Reade Manufacturing brought the lawsuit against Liberty Mutual because they believe the insurance company is not covering the underlying damages in good faith and in accordance with their given policy. The issue is whether there was an “occurrence” as defined by the policy. This policy is worth 2 million dollars and could help Reade navigate a difficult situation. What is unknown is whether Reade did act with gross negligence in the transportation and distribution of these materials.


Experience matters when understanding these kinds of “occurrence” cases. What is known is that the law applies equally to all claimants and policyholders and that if Liberty Mutual acted in bad faith, then they may owe even more money to the insured.


Mehr, Fairbanks & Peterson take no position regarding the wrongdoings in this case, but we do recognize the example it provides for demonstrating the nature of bad-faith insurance cases. Bad faith insurance occurs frequently, and our principal, Austin Mehr, has written a published, scholarly book on Bad faith insurance in Kentucky and has taken more bad faith insurance cases to trial than any other attorney in Kentucky.


Mehr, Fairbanks & Peterson fights for clients and litigates bad faith insurance cases to success. If you think your insurance company may have acted in bad faith, please give us a call. We want to help you get justice.


This post is not to be construed as legal advice in any way. Always contact an attorney with any legal decisions you may need to make.


Written by Iain Feeney and Austin Mehr

Mehr, Fairbanks & Peterson

Press: runner@austinmehr.com

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