Insurers and Their Duty to Settle

The duty of an insurance company facing a liability claim when liability is reasonably clear to make a reasonable offer of settlement has been reaffirmed in an admiralty case.  MT “Baltic Commander” v. Mass Port Authority, U.S. District Court (Civil Action No. 10-10597-WGY).  A loss was suffered at a wharf facility under circumstances creating liability in an insured.  The court ruled that liability was reasonably clear from the very beginning of the accident and damage case and even though the claimant Mass Port was foolish not to provide certain voluntary disclosures about its actual expenditures and its demand was unreasonably high, the insurer had a good idea from its own expert as to the expenditures and its offer was unreasonably low.  Once the insurer had learned in this action that the claimant had actually expended over $100,000 in cleanup costs, not offering to pay at least that amount plus something for restoring parts of the wharf, violated § 3(9)(d), (f) and (g).  While the insurer escaped a multiplier on damages, it was required to pay the claimant’s attorney’s fees.