Can I sue someone for filing a false claim against my bond insurance? Defamation?

UPDATED: Oct 1, 2022

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Can I sue someone for filing a false claim against my bond insurance? Defamation?

I remodeled a house for an investment company. The house burned down but wasn’t my fault. After finding this out, the investment company dropped the claim. This caused me to lose my surety bond and my builder’s license.

Asked on November 3, 2017 under Business Law, South Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You can only sue them for this if they acted in a knowingly wrongful way--i.e. filed the claim knowing (or if they reasonably should have known based on the facts available to them; that is, they can't rely on "willful blindness" to save them) that the claim was false; in that instance, you could potentially claims for defamation and/or tortious (i.e. wrongful) interference with economic advantage. But the law does not punish people or businesses, or make them liable, for in good faith filing or bringing claims even if they turn out later to have been mistaken.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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