PUBLISHED ON: December 1, 2017
Deciding whether to settle or fight a lawsuit is a serious and sensitive endeavor. Defendants to a lawsuit must analyze the financial, legal, emotional, and business costs involved with battling it out in a public forum. For some litigants, protecting their privacy, avoiding risk, and reducing the stress of litigation is worth the price of settlement (even if they believe they are in the right); for others, the chance to publicly refute a false allegation is worth the price of a fight.
What many parties to litigation do not recognize, however, is that most liability insurance policies do not simply maintain that the insurance company will pay for the defense; they also provide the insurance company with the right, under certain circumstances, to control aspects of the defense of the underlying action, including whether and when to settle. For that reason, whether the policyholder wants to settle a complex case and simply be done with it, or is determined to reject settlement and fight a baseless claim to the bitter end, it is crucial that the covered party know its rights and the rights of its insurance company.