When settling a lawsuit against your company, you should do everything you can to keep your insurance company aboard. If the insurance company unreasonably refuses consent to a fair settlement, though, be prepared to fight.
Most hotels buy commercial general liability insurance to ensure that if they are sued by a third party, their insurance company will pay for the defense. Many hotel operators fail to recognize, however, that most liability policies provide the insurance company with the right, under certain circumstances, to control aspects of the defense of the underlying action, including whether and when to settle. It is crucial to know your rights and the rights of your insurance company when the prospect of settling a case arises.
To read the article: Don't Settle Away Your Liability Insurance