Bad Faith

My Insurer Refused An Offer To Settle The Lawsuit Against Me

Liability insurance policies promise to pay for the cost to defend the insured in a covered lawsuit and to fund the judgment or settlement in that suit, up to the limits of insurance.  In most cases, the policy limits are exclusive of defense costs and only apply to the ultimate judgment or settlement.  In these circumstances, insurers retain the right to control the defense and settlement of the action, subject to the implied covenant of good faith and fair dealing.  That covenant requires insurers to act reasonably and consider the insured's interests equal to their own.  If an insurer breaches the implied covenant, an insured may sue the insurer in tort for acting in “bad faith.”