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Oct. 21, 2016
Decision sharpens the teeth on an insurer's duty to settle
Where a primary insurer rejects a reasonable settlement demand within its policy limits, a recent case holds that it can be liable to an excess insurer if the case settles for an amount over the primary policy limits. By Benjamin R. Fliegel, Douglas C. Rawles and Christopher J. Pulido
A California appellate court recently sharpened the teeth of an insurance company's duty to settle in Ace American Insurance Co. v. Fireman's Fund Ins. Co., 2 Cal. App. 5th 159 (2016). Where a primary insurer rejects a reasonable settlement demand within its policy limits, Ace American holds that it can be liable to an excess insurer if the case settles for an am...
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