Travelers Prop. Cas. Co. v. Stresscon Co

Summary

The court held that an insurance policy’s no-voluntary-payments clause barred indemnification for an insured’s unauthorized settlement, without requiring the insurer to prove prejudice. The court declined to extend the notice-prejudice rule to that clause because the provision defined the scope of coverage and protected the insurer’s contractual right to control defense and settlement. It therefore reversed and remanded with directions to vacate the jury verdict and enter a directed verdict for Travelers.