Fighting Insurance Bad Faith
A recent jury verdict in a Denver District Court insurance bad faith case has drawn significant attention in both the legal and insurance industries. Fermin Salguero-Quijada was catastrophically injured on the job. He was left fighting not just for his health but also for the basic workers’ compensation benefits he was entitled to. Salguero-Quijada’s insurer didn’t just delay – they outright denied and obstructed his care over a period of years. The result? A jury awarded a staggering $145 million in damages – $60 million of which were punitive damages. This sends a clear message: insurance bad faith has consequences.
What Is Insurance Bad Faith?
In Colorado, every insurance contract includes an implied covenant of good faith and fair dealing. This means that insurance companies are legally obligated to act reasonably and fairly when handling claims, whether they are paying benefits directly to their insured or defending the insured against a third-party claim. When an insurer breaches this duty, it can be held liable not just for breach of contract, but also for bad faith in tort. The consequences can include compensatory and punitive damages, especially when the insurer’s conduct is found to be intentional or reckless.
There are two types of insurance bad faith:
- First-party bad faith: This occurs when an insurance company unreasonably refuses to pay, delays payment, or offers less than what is owed under policies like health, disability, life, property, or auto insurance. The insured is seeking benefits directly from their own insurer. When insurers don’t act in good faith, policyholders can be left without the resources they need during critical times.
- Third-party bad faith: This arises in liability insurance claims, where an insurer must defend or settle a claim made by someone else against the insured. Here, the insurance company has a duty to protect its insured from financial harm. If it fails to reasonably investigate or settle within policy limits, the insured could be exposed to excess judgments.
Bad faith is more than just a legal technicality, it has real-world consequences. When insurers unreasonably delay or deny claims, policyholders can be left without the resources they need during some of the most vulnerable moments of their lives. In the workers’ compensation context, this can mean being denied critical medical treatment and care after a life-altering injury, as seen in Salguero-Quijada’s case. Colorado’s bad faith laws exist to prevent exactly this kind of injustice. It gives injured parties a legal remedy when insurance companies fail to meet their obligations.
Case in Focus: A $145 Million Verdict Against NorGUARD Insurance
In September 2021, 20-year-old Fermin Salguero-Quijada suffered a catastrophic injury while working as a painter for a Colorado-based company at a job site in Salt Lake City. He fell at least 15 feet from a ladder, sustaining severe traumatic brain injuries. He was unresponsive upon his arrival at the University of Utah Hospital and was placed on life support. There, doctors diagnosed multiple brain hemorrhages and determined he would require extensive and ongoing care.
Salguero-Quijada remained hospitalized for nearly two months, during which time his medical team made arrangements to transfer him to Craig Hospital in Englewood, Colorado. Craig Hospital is a nationally recognized rehabilitation center specializing in traumatic brain injuries. However, while working to obtain insurance authorization for the transfer, the workers’ compensation insurer for Salguero-Quijada’s employer, NorGUARD Insurance Company, denied his claim.
Initially, NorGUARD stated it needed more time to investigate. But the delays continued for weeks. Eventually, the insurer shifted its position entirely, arguing that it wasn’t responsible for the claim at all. Instead, NorGUARD claimed that the insurance company covering the general contractor that had hired Salguero-Quijada’s painting company should bear responsibility for the injury.
Meanwhile, Salguero-Quijada’s family took over full-time care without the financial or medical support that workers’ compensation should have provided. Despite the severity of his injuries and clear employment-related cause, the dispute dragged on and Salguero-Quijada could not get the inpatient care at Craig Hospital that he desperately needed. It wasn’t until July 2022 — ten months after the fall — that a judge held a hearing and ruled that NorGUARD was, in fact, liable for the claim.
NorGUARD didn’t accept the ruling. The company appealed, further prolonging the family’s hardship. Even after the appellate ruling upheld the original decision, NorGUARD continued to delay payment and deny necessary care. The pattern of obstruction lasted more than two years from the date of the injury.
Faced with persistent noncompliance and a complete breakdown in the insurer’s duty of good faith, Salguero-Quijada’s family filed a lawsuit against NorGUARD, alleging insurance bad faith. They asserted that NorGUARD had intentionally and unjustifiably withheld coverage, causing significant financial and emotional harm to both Salguero-Quijada and his caregivers.
In April 2025, after a week and a half long trial, a jury emphatically agreed. The panel awarded $145 million in damages, including substantial punitive damages of $60 million, finding that NorGUARD’s actions were not just negligent, but willful and malicious. The verdict represents one of the largest bad faith awards in Colorado history. It serves as a powerful reminder of the legal and ethical obligations insurers owe to injured workers.
What This Means for Injured Workers and Their Families
The case against NorGUARD Insurance Company underscores a critical truth: injured workers and their families are often left vulnerable when insurers fail to meet their legal obligations. Fortunately, Colorado law provides meaningful remedies for victims of insurance bad faith. For example, under Colorado Revised Statutes § 10-3-1116, an injured party may bring a claim against an insurer for the unreasonable delay or denial of benefits. If the court finds that the insurer acted unreasonably, the statute allows the insured to recover two times the amount of the covered benefit, plus reasonable attorney’s fees and court costs. This is designed to not only compensate the victim but also deter future misconduct by insurers.
Additionally, punitive damages may be awarded under Colorado law if the insurer’s conduct involved fraud, malice, or willful and wanton behavior. These types of damages are meant to punish egregious behavior and send a clear message that bad faith will not be tolerated.
Insurance companies often have significant resources and teams of lawyers working to minimize payouts. Injured individuals, by contrast, may be overwhelmed, in pain, and unfamiliar with the claims process.
That’s why having strong legal representation matters.
In Salguero-Quijada’s case, NorGUARD initially offered a settlement of $750,000. This is a fraction of what his attorneys believed the claim was worth. Thanks to diligent and persistent legal advocacy, his attorneys rejected the lowball offer and pursued litigation. NorGUARD continued with various low-ball settlement offers throughout litigation, including a final offer of $3 million after closing arguments. The jury’s $145 million verdict underscores the importance of strong legal advocacy in holding insurers accountable.
Five Signs an Insurer May Be Acting in Bad Faith
Recognizing bad faith isn’t always easy, especially when insurers use vague language or procedural excuses. Here are five red flags to watch for if you suspect an insurer is acting in bad faith:
- Refusal to Pay a Valid Claim
If the claim is clearly covered and well-documented, outright denial may indicate bad faith. - Denial Without Explanation
Insurers must provide a valid reason for denying coverage. Failure to do so is a serious concern. - Lowball Settlement Offers
Offering significantly less than what a claim is worth can be a tactic to avoid fair compensation. - Unreasonable Delays
If an insurer drags out the claim process without justification, especially when care is urgent, that may be bad faith. - Misrepresenting Policy Terms or Law
Deliberately distorting the terms of your policy or relevant legal standards is a deceptive practice and violates the duty of good faith.
What to Do If You Suspect Bad Faith
If your insurer is dragging its feet, denying valid claims, or giving you the runaround, don’t ignore the signs. Act early:
- Document Everything – Keep copies of all correspondence, claim submissions, medical records, and insurer responses. Take notes during every interaction.
- Request Written Explanations – If a claim is denied or delayed, insist on detailed written explanation and policy citation.
- Consult an Attorney – A qualified attorney at Ogborn Mihm can review your case, determine whether bad faith has occurred, and advise you on next steps.
Bad faith insurance practices don’t just delay compensation, they jeopardize lives. Knowing your rights, and acting on them, is key to protecting yourself and your loved ones in the aftermath of a serious injury. At Ogborn Mihm, we know the tactics insurers use – and how to fight back.
The Bigger Picture: Holding Insurers Accountable
While the $145 million verdict in Salguero-Quijada’s case is extraordinary, the issues at its core are far from uncommon. Injured workers and their families often face uphill battles when trying to access the care and compensation to which they are legally entitled.
At its heart, workers’ compensation is supposed to be a no-fault system designed to provide swift medical treatment and wage replacement to employees hurt on the job. But when insurance companies delay, deny, or deflect responsibility without justification, they undermine the very purpose of the system. These tactics don’t just cause paperwork headaches – they create real suffering for people already facing serious medical and financial challenges.
Bad faith laws exist for exactly this reason. They serve as a critical check on insurer power, creating legal consequences for companies that act in ways that are unreasonable, dishonest, or harmful to policyholders. In Salguero-Quijada’s case, the jury’s verdict affirmed that insurers cannot place profits ahead of people without consequence.
Large verdicts like this one also serve a broader societal function. They send a message not only to the insurer in question but to the entire industry: Bad faith conduct will not be tolerated. When one insurer is penalized for misconduct, others are more likely to adhere to their obligations in future cases.
Ultimately, accountability through litigation is one of the most powerful tools injured workers have. It’s a way to ensure that no one, regardless of income, immigration status, or job title, is left to suffer in silence when insurers fail to uphold their end of the bargain.
Conclusion
The $145,000,000 jury verdict in Fermin Salguero-Quijada’s case wasn’t just about a contract gone wrong. It was about justice for a young man whose life was permanently altered, and whose family was forced to shoulder unimaginable burdens because an insurer chose denial over decency.
NorGUARD’s delays meant that Salguero-Quijada never received the intensive inpatient care he desperately needed. Instead, his family had to provide 24/7 support. Medical experts testified that with proper treatment, he could have regained some independence. The consequences of the insurer’s failure were not theoretical – they were lived, daily, by him and his loved ones.
This case highlights a painful reality: insurance companies do not always act in good faith, even when the need for coverage is obvious and urgent. When they fail in their legal and ethical duties, the consequences for injured workers and their families can be devastating. It also shows the power of the law – and of committed legal advocacy – to correct these wrongs.
Colorado’s insurance bad faith statutes exist to level the playing field. They ensure that policyholders and injured workers have legal recourse when insurers act unfairly. They provide real consequences for companies that put profits ahead of people. Whether it’s through statutory damages, punitive awards, or simply forcing an insurer to do what it should have done in the first place, these laws are essential tools for accountability.
Have you or a loved one faced an insurance company that is dragging its feet or denying benefits without explanation? Are they offering far less than your claim is worth? You don’t have to navigate it alone. Contact the team at Ogborn Mihm. We’re here to hold insurers accountable – and help you get the justice and care you deserve.
In the end, Salguero-Quijada’s case is not just a sobering reminder of how high the stakes can be. It’s also a testament to what can be achieved when the legal system works as it should.
