What happens when the claimant settles with the tortfeasor pre-suit?

May 15, 2015 E-Alerts

The claimant/insured does not trigger any duty on behalf of the carrier to pay, or expose the carrier to bad faith risk simply by settling with the tortfeasor.  The caselaw is very supportive of the notion that there can be no bad faith absent a judgment, but there are some cases that at least leave the possibility open. As long as you have communicated with the claimant/insured, asked them to forward you the medical bills, and conducted a reasonable investigation into the facts of the claim, I think you are in as good of a position as possible with regard to any bad faith allegations. That is especially true when it is the claimant/insured himself who delays the settlement of the underlying claim.