The Right to Settle - Protecting the right to control your case

Metropolitan Corporate Counsel

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PUBLISHED ON: September 1, 2016

Every year, hotels are subject to a host of lawsuits, both valid and meritless, from guests who claim to have suffered an on-premises injury. The defense of such cases can be extremely expensive, and most hotels accordingly purchase commercial general liability (CGL) insurance so that if they are sued by a third party, their insurance company will pay for the defense.

What many hotel operators fail to recognize, however, is that most liability policies do not simply maintain that the insurance company will pay for the defense. They also 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. As such, whether you want to settle a complex case and be done with it, or you’re determined to reject settlement and fight a baseless claim to the bitter end, it is crucial to know your rights and the rights of your insurance company. Otherwise, you may end up with less than the insurance coverage to which you are entitled.