Travelers Insurance Lawsuit: Bad Faith, Asbestos, and Antitrust Cases

Travelers Insurance has been the defendant in a long line of lawsuits touching nearly every corner of the insurance business. Travelers Insurance lawsuits over the past four decades include the Johns-Manville asbestos settlement that reached the U.S. Supreme Court, a $77 million multistate antitrust action over bid-rigging, repeated bad faith claims (including a pending $2 billion suit filed in 2026), a 2021 data breach class action, uninsured motorist coverage disputes, and coverage fights tied to the opioid crisis. Outcomes have ranged from nine-figure payouts to defense wins.

The $2 Billion Bad Faith Lawsuit Filed in 2026

The largest lawsuit currently pending against Travelers grows out of the 2016 death of Eric Johnson, a 64-year-old courier who died after transporting four coolers of dry ice in a small vehicle for PFD Supply, a subsidiary of Prairie Farms Dairy. Responders noted a chemical smell consistent with high concentrations of carbon dioxide; Johnson lost consciousness while driving and died three days later.¹

His family sued PFD Supply in 2017. On February 27, 2026, a Madison County, Illinois jury awarded them $241 million: $49.5 million in compensatory damages and $191.5 million in punitive damages.¹

A month later, on March 31, 2026, Paula Johnson (Eric’s widow and an assignee of Prairie Farms’ claims against Travelers) filed a bad faith lawsuit against Travelers Property Casualty Company of America in the U.S. District Court for the Southern District of Illinois. The complaint alleges Travelers “gambled with the financial interests” of its insured by refusing to settle within available policy limits over nearly ten years despite Prairie Farms’ repeated requests, causing the excess judgment.² The plaintiff seeks more than $2 billion.³ Travelers had not filed a response as of early 2026.⁴

The Johns-Manville Asbestos Settlement and Supreme Court Ruling

The largest matter in Travelers’ history traces to the 1986 bankruptcy of Johns-Manville Corporation, once one of the world’s largest asbestos manufacturers. Travelers was Manville’s primary insurer and paid $80 million into a trust for asbestos victims. The bankruptcy court issued permanent “1986 Orders” barring future claims against the insurers that were “based upon, arising out of or relating to” their coverage of Manville.⁵

Years later, plaintiffs filed “Direct Actions” in state courts, alleging Travelers itself had an independent duty to warn the public about asbestos dangers and had engaged in unfair settlement practices.⁶ Travelers agreed to pay close to $450 million to settle those Direct Action claims, but only if the bankruptcy court confirmed the 1986 Orders barred such suits.⁷

On June 18, 2009, in Travelers Indemnity Co. v. Bailey, 557 U.S. 137, the U.S. Supreme Court held that the 1986 Orders were broad enough to cover the Direct Actions and that, because those orders were final and unchallenged on direct review, parties could not attack them decades later. The Court called the definition of barred “Policy Claims” “expansive” and said “the time to prune them is over.”⁵ The ruling was narrow: the Court did not decide whether a bankruptcy court could properly issue such an injunction today, and left open whether individual plaintiffs had received sufficient notice.⁸ Travelers ultimately paid the $450 million plus $65 million in interest.⁷

The $77 Million Antitrust Settlement Over Bid Rigging

In 2006, the attorneys general of New York, Connecticut, and Illinois reached a $77 million settlement with The St. Paul Travelers Companies after a two-year investigation led by then-New York Attorney General Eliot Spitzer. Investigators found that Travelers paid hidden “contingent commissions” to insurance brokers (including Marsh, Aon, and Willis) to steer customers to Travelers policies. They also uncovered fake “B Quotes” used to rig the excess casualty market, undisclosed “book roll” arrangements shifting thousands of customers to Travelers, and a secret agreement with The Hartford and CNA to divide small business clients.⁹

Travelers paid $37 million in restitution to policyholders who bought excess casualty insurance through Marsh between 2000 and 2004, plus $40 million in civil penalties split among the three states.¹⁰ Among the more unusual findings: Travelers had run “service centers” where its own employees posed as independent agents.⁹

Bad Faith Verdicts and Rulings

Bad faith allegations (that Travelers unreasonably delayed, underpaid, or refused to defend claims) have produced several notable rulings.

In Vann v. Travelers, Gordon Vann, an Oakland auto repair shop owner, was sued over alleged environmental contamination. Travelers refused to defend him. A jury found that Travelers acted with “malice, fraud and oppression” and had implemented a deliberate strategy for handling environmental claims designed to deprive policyholders of coverage. The jury awarded Vann $26.5 million, including $25 million in punitive damages; the judgment was upheld on appeal, and the U.S. Supreme Court denied review.¹¹

In May 2024, a federal judge in the Northern District of New York declined to dismiss bad faith and consumer protection claims brought by PAR Technology Corp. against Travelers. PAR alleged Travelers refused to defend or pay a $790,000 settlement in a biometric privacy case and took over a year to respond before issuing a final denial. The court found PAR’s bad faith claim was distinct from its breach of contract claim because it sought damages beyond policy limits, and that an alleged pattern of unreasonable delay and denial could support a claim under New York’s consumer protection statute.¹²

The 2021 Data Breach Class Action

Between April and November 2021, unauthorized parties used the credentials of a small number of insurance agents to access Travelers’ online agent portal. Names, addresses, dates of birth, and driver’s license numbers of tens of thousands of people were exposed. The plaintiff, Jennifer Rand, alleged that Travelers’ system auto-populated sensitive data in quote requests, effectively disclosing it to anyone submitting a request through a compromised login. The New York State Attorney General identified about 88,858 affected individuals.¹³

Rand v. The Travelers Indemnity Company, filed in the Southern District of New York, asserted negligence, a Driver’s Privacy Protection Act claim, and New York consumer protection violations.¹⁴ Travelers denied the allegations but agreed to a $6 million settlement fund. A federal judge granted final approval in early 2025.¹⁵

Arizona UM/UIM Stacking Class Action

In Dale v. Travelers, filed in the U.S. District Court for the District of Arizona, plaintiffs Jennifer Dale and Cameron Bode alleged Travelers failed to properly inform policyholders about their right to “stack” uninsured and underinsured motorist coverage when a policy covered more than one vehicle. According to the complaint, Travelers capped claim payments at the single-vehicle limit even on multi-vehicle policies.¹⁶

Travelers denied liability but agreed to a $14.97 million settlement fund covering Arizona policyholders with qualifying policies between September 2016 and October 2024. The case was terminated on April 11, 2025.¹⁷

Opioid Coverage Disputes

Travelers has appeared in opioid litigation as an insurer contesting coverage, not as a manufacturer or distributor.

In Travelers Property Casualty Company v. Actavis, Inc., a 2017 California Court of Appeal decision, the court held Travelers had no duty to defend its policyholder against opioid suits brought by California counties and the city of Chicago. The underlying complaints alleged only deliberate conduct (a “sophisticated and highly deceptive marketing campaign”), and insurance policies generally do not cover intentional wrongdoing.⁸ Other courts have distinguished Actavis where underlying complaints also alleged negligence, finding a duty to defend in those situations.

In In Re: CVS Opioid Insurance Litigation, the Delaware Supreme Court ruled in August 2025 that Travelers (as successor to Gulf Insurance Company) and other insurers had no duty to defend or indemnify CVS Health against thousands of opioid lawsuits. The court held the underlying cases sought recovery for the plaintiffs’ own economic losses rather than for “specific, individualized bodily injury or property damage” as the policies required.¹⁸

Other Settlements Involving Travelers

Hurricane Katrina and Rita Claims

In Arthur v. The Standard Fire Insurance Co. and The Travelers Indemnity Co., Louisiana policyholders alleged Travelers underpaid property damage claims from Hurricanes Katrina and Rita. Travelers denied liability but paid $2 million into a settlement fund plus $425,000 in attorneys’ fees.¹⁹

Medicare Secondary Payer Case

The Department of Justice sued Travelers in 1989 in the U.S. District Court in Hartford, alleging that Medicare had made primary payments for services Travelers should have covered under federal Medicare Secondary Payer laws, which require private insurers to pay first when a person has both Medicare and employer coverage.²⁰ The case settled in 1995 for $10 million, with no admission of liability.²¹

Workers’ Compensation Actions

In Oregon, a 2011 class action brought by Lincoln City Physical Therapy alleged Travelers units illegally applied discounts to workers’ compensation medical fees through preferred provider organizations, underpaying hundreds of providers.²² In Texas, the Division of Workers’ Compensation sanctioned Travelers in 2021 with an $11,000 administrative penalty after the company issued a first temporary income benefit payment 107 days late.²³

A Case Travelers Won

Not every suit against Travelers has succeeded. In Hayter v. Travelers Indemnity Company, an Oregon policyholder who won a $5.5 million arbitration award on an uninsured motorist claim sued Travelers for negligence, alleging the insurer had undervalued the claim and forced him into arbitration. In August 2025, an Oregon federal court granted summary judgment to Travelers, finding the company had acknowledged coverage, that the dispute was a legitimate valuation disagreement rather than bad faith, and that the arbitration award could not retroactively prove the earlier settlement offer was negligent.²⁴

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Riverbender. Travelers Hit With $2 Billion Bad-Faith Lawsuit After $241 Million Wrongful-Death Verdict
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Salvi, Schostok & Pritchard P.C. Travelers Bad Faith Lawsuit Dry Ice Death
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Anderson Kill P.C. PAR Technology Corp. v. Travelers Property Casualty Co. of America
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Travelers Data Settlement. Rand v. Travelers Data Settlement FAQs
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Law360. Travelers $6M Data Breach Settlement Nabs Final OK
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AZ UM Insurance Claims. Dale v. Travelers FAQ
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CourtListener. Dale v. Travelers Property Casualty Insurance Company
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Justia. In Re: CVS Opioid Insurance Litigation
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PR Newswire. Travelers Insurance Reaches Settlement With Policyholders Who Owned Property in Louisiana Damaged by Hurricane Katrina or Rita
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U.S. Department of Justice. Travelers Insurance Settlement
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Hartford Courant. Travelers Insurance Pays $10 Million to Settle Suit
22
Black Chapman. Travelers Units Sued Over Discounting Workers Comp Medical Fees
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Texas Department of Insurance, Division of Workers’ Compensation. Official Order No. 2021-6949
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FindLaw. Hayter v. Travelers Indemnity Company