The Great Power Of An Insurance Co., As Told By Calif.

Law360, New York (November 1, 2013, 1:12 PM EDT) -- A liability insurance company has the right to take over the defense of a policyholder and to control all settlement discussions. What happens if the carrier fails to pursue settlement negotiations with sufficient zeal, knowing full well that it was leaving the insured exposed to liability above policy limits? You may be at risk in California if your insurer does this to you.

This is how the California State Court of Appeal described the issue in Reid v. Mercury Ins. Co.: "This case involves an insurer's...
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