Georgia Supreme Court: Insured Cannot Sue for Settlement Amount or Bad Faith Absent Insurer’s “Consent to Settle” [FC&S Legal]

Angelo Savino and Elan Kandel of the Global Insurance Department co-authored this article in FC&S Legal: The Insurance Coverage Law Information Center. The Georgia Supreme Court unanimously held that when an insured fails to seek its insurer’s consent to settle a claim, the insured cannot pursue litigation against its insurer to recover settlement amounts paid by the insured without its insurer’s consent or for bad faith refusal to settle.

The Georgia Supreme Court’s decision in Piedmont is significant in that it squarely places Georgia among those jurisdictions that strictly enforce an insurance policy’s no action provision, when an insured violates the consent to settle requirement. Moreover, this appears to be a flat prohibition of any claim for coverage or bad faith without any analysis of whether the insurer reasonably withheld consent. The decision provides a firm lesson to insureds whose policies are governed by Georgia law that they need to obtain the insurer’s prior consent to each and every settlement offer, or risk losing their coverage.

To read the full article, click here.

Share Page On LinkedIn

Related Attorneys

Angelo G. Savino

Chair, Professional Liability Practice Group

(212) 908-1248

Related Practices

Related Industries