Alas, A Very Hot Issue in California Insurance Law is Decided (At Least for Now): Insurers Have No Affirmative Duty to Settle as Long as They Do Not Foreclose the Possibility of Settlement and/or Abse


Absent a settlement demand or some indication the injured party is interested in settlement, an insurer is not liable for a failure to act, so long as the insurer did not foreclose the possibility of settlement. For an insurer to be held liable for bad faith in pursuing settlement discussions, the injured party must have communicated their interest in settling the matter to the insurer.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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