Schwartz et al. vs. Liberty Mutual Insurance Company
Year 2006
Court U.S. Court of Appeals, 2nd Circuit
Case Number Docket No. 07-2794-cv (L), 07-2818-cv (CON)
  • Insurer must show prejudice when insured settles without insurer's authority
  • New York

The Policyholder should not forfeit coverage under the policy when the policyholder settles a claim without the insurance company’s authority, after the insurance company intentionally placed it interests adverse to those of the policyholder by issuing a reservation of rights and without any showing that the insurance company was prejudiced by the settlement.