Insurance
May 4, 2017
'Fettering' insurers' right to settle cases against insureds
Insurance policy provisions that give insurers who are defending claims against insureds unfettered discretion to settle is problematic for insureds.
Liability insurance policies often provide that, when an insurer is defending claims against an insured, the insurer may settle claims "as it deems expedient" or at its discretion. Many insurers take the position that such a "deems expedient" or "discretionary" provision gives the insurer the unfettered right to settle claims against the insured, even when the insured is unaware of the settlement or is aware of a potential settlement and objects to it. Indeed, insurers often take the posit...
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