Recovering a settlement from the defendant's insurer
An insurer refuses to defend or otherwise denies coverage to a defendant. The defendant believes it has no liability, but the plaintiff seeks bet-the-house or bet-the-company damages. If the insured settles may the defendant or its assignees recover indemnity from the insurer even though it denied liability?
In an excellent post that surveys the case law, Marc Mayerson over at the Insurance Scrawl says "yes." The question in the insurance case is not "what really happened, " but "what did [the defendant] fear a judge or jury might believe happened."
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