CLM Annual Insurance Conference
Rick was selected to help lead a panel discussion entitled “The policyholder who will ‘never settle’ that third party claim -- containing the risk using the non-cooperation clause and hammer/consent clauses.” The panel addressed the fact that most policyholders appreciate settlement, but that some (in certain cases, especially professional malpractice) can resist settlement and prefer to fight for reputational or even emotional reasons. This can lead to increased risk and to coverage-related difficulties, including issues involving alleged non-cooperation by the policyholder and even related arguments (by an injured party) about policyholder and insurer collusion. Most CGL policies permit the insurer to settle without the consent of the policyholder, if done in good faith. Some policies grant policyholders the right to consent to any settlement. But in those cases, insurers can often limit their exposure through use of a hammer clause (if written into the policy, imposing limits on indemnity if a settlement opportunity is handled properly). In short, the panel addressed recent developments and strategies to limit risk in situations involving insureds who refuse to settle and who may be failing to cooperate.