Malicious prosecution is the action of starting or continuing a lawsuit or insurance claim with bad intentions, usually without a good reason.
In the context of insurance, this can happen when a person files a claim for benefits that are either made up or exaggerated, intending to commit fraud. This includes cases where the claimant changes facts or circumstances to make their case look valid, even though there was no real loss or damage.
Insurers take these actions very seriously because they can harm the integrity of the insurance system and lead to higher costs for all policyholders. Understanding the elements of malicious prosecution is essential, especially in relation to the Phase Claims Act, as it helps maintain fairness and honesty in the process. Malicious litigation and wrongful prosecution can have serious implications, not just for the individual involved but also for the broader insurance community.
At PSIC, we want to ensure you have the protection you need. Our Umbrella and Personal liability policies include coverage for damages you may cause due to malicious prosecution under personal injury protection.
Additionally, if you have property policies, you can add this coverage by including the personal injury endorsement.
We understand that navigating insurance options can be complex, so if you have any questions or need assistance, please ask your trusted agent.
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Last updated: June 27, 2023
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