A $6 million judgment and a standoff over insurance payouts have put Progressive and Protective Insurance in the hot seat, with a new lawsuit raising big questions for the professional liability sector.
On January 10, 2025, a federal court in Pennsylvania handed down a $6,024,504 judgment in favor of Bayshore Mall 1A, LLC, Bayshore Mall 1B, LLC, and Bayshore Mall 2, LLC. The dispute traces back to a 2004 shopping center purchase in New Jersey, where Bayshore says it relied on The Amalgamated Abstract Company of PA, Inc. to provide all the right title documents. According to the complaint, a key document was missed, and when it finally surfaced years later, it allegedly slashed the value of the property by millions.
Bayshore took Abstract to court for negligence. At the time, Abstract had a professional liability policy with Protective Insurance Company, capped at $1 million. The policy, as described in the complaint, said Protective would pay for any loss and defense costs if a claim was made and reported during the policy period, as long as the wrongful act happened after the retroactive date.
The complaint says Protective accepted the claim and brought in defense lawyers, but Bayshore claims the defense team didn’t do much to settle. Even after the court rejected Abstract’s motion for summary judgment and sided with Bayshore’s claims, the complaint says the defense didn’t try to negotiate seriously. Bayshore offered to settle for $830,000 - well within the $1 million policy limit - but got no response. Abstract’s defense later countered with just $100,000. With no deal in sight, the case went to a bench trial.
The court’s January 2025 decision left Abstract on the hook for more than $6 million. According to the complaint, Abstract didn’t appeal. Bayshore’s lawyers then asked Protective to pay up the policy balance. Protective, through its defense counsel, responded that it would offer the remaining policy limits - about $650,000, after spending roughly $350,000 on defense costs - if Bayshore would agree to release the rest of the judgment. Bayshore said no.
As of the complaint’s filing, Protective hadn’t paid any of the judgment. In July 2025, Abstract assigned all its rights against Protective and Progressive to Bayshore, setting the stage for this new lawsuit.
Bayshore’s complaint argues that Protective’s handling of the claim - especially its refusal to settle within policy limits and its failure to pay even after the judgment - amounts to bad faith. The policy language at issue, as quoted in the complaint, includes Protective’s promise to pay all losses and defense costs, and its right and duty to defend claims. The $1 million cap is clear, but Bayshore says the insurer’s actions left its insured exposed to far greater losses.
It’s important to remember that these are Bayshore’s claims, not established facts. The insurers haven’t yet had their say in court, and the outcome is still up in the air.
For insurance professionals, this case is a reminder of how quickly a routine claim can turn into a high-stakes dispute over coverage, settlement strategy, and the fine print of liability policies. As the litigation unfolds, the industry will be watching closely to see how the courts weigh in on insurer obligations when the stakes are high and the policy limits are on the line.
