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Risk and Recovery: Legal Insights for the Insured

Tag Archives: Reservation of Rights

Pennsylvania Supreme Court Holds That Insured May Settle Tort Claim Without Insurer Consent Under “Fair and Reasonable” Standard

Posted in Commercial General Liability (CGL)

In Babcock & Wilcox Co. v. American Nuclear Insurers, a divided Supreme Court of Pennsylvania, deciding an issue of first impression under Pennsylvania law, recently held that when an insurer defends its insured subject to a reservation of rights, the insured may accept a settlement over the insurer’s refusal where the settlement is fair, reasonable,… Continue Reading

Calling a Letter a “Reservation of Rights” Does Not Necessarily Make It So

Posted in Claims Management

Many insurers are in the habit of sending perfunctory “reservation of rights” letters to their insureds throughout the lifetime of a claim.  The reason they do so is not a very well-guarded secret in the insurance industry.  An insurer that acknowledges coverage must pay any eventual settlement or judgment, while an insurer that denies coverage… Continue Reading