; Clarifying Settlement Reimbursement
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Clarifying Settlement Reimbursement


Reversing its May 2005 ruling, the Texas Supreme Court recently held that an insurance company cannot seek reimbursement for the settlement of a claim that is later found to be an uncovered liability unless the policyholder expressly agreed to the insurance company's right to do so. In Excess Underwriters at Lloyd's, London, et al. v. Frank's Casing Crew & Rental Tools Inc, Frank's Casing had issued a settlement demand to its excess underwriters, Lloyd's, and requested that it accept the offer. In reaching its current holding, the Texas Supreme Court recognized that the risk of coverage uncertainties is best placed with the insurer, not the policyholder.

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