We see carriers regularly breach the insurance policy in Bad Faith when it ignores the Duty to Settle.
It seems counter-intuitive, at first, to think that the carrier has a Duty to Settle a case. But it does.
An insurance policy is different from most other contracts. It is designed to protect the insured. If the insured (that’d be the broker, or you) is fully covered, there’s no issue—unless the injury is greater than the coverage amount.
If the case is one of mixed claims, then the insured (that’d be you, again) has a BIG issue.
If some claims are covered, and others are not, the carrier must settle all claims if the carrier gets a reasonable demand that is within the policy limit.
Failure to settle and bad faith
Refusing to pay and settle all claims … if a demand is made within or at Policy Limits, or Failure to Settle, is a Bad Faith breach of the policy. If, after the refusal to settle, the award is for more than the policy amount, the carrier may be responsible for all of it, including any portion related to uncovered claims!
If you suspect that your insurance carrier may be in breach of its Duty to Settle, you should immediately give us a call or send an email using the contact form on he right.