Insurance 101 – Chapter 11 – Volume 66 – Avoiding Charges of Bad Faith – 2

 Avoiding Charges of Bad Faith – 2

In assessing whether an insurer is liable to its insured for personal liability in excess of policy limits, the proper test to be applied is whether the reasonably prudent insurer would have refused to settle within the policy limits under the facts and circumstances of the case, bearing in mind always its duty of good faith and fair dealing with its insured.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

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