Fireman’s Fund Insurance Company, Plaintiff-Respondent and Cross-Appellant v. Security Insurance Company of…

Summary

The Supreme Court of New Jersey affirmed the lower courts, holding that an insurer who acts in bad faith by refusing to settle a claim that far exceeds policy limits forfeits its contractual right to control settlement and is liable for the policy limits, but the insurer is not liable for punitive damages. The dissent argued that the insurer should retain its control over settlements.