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No Showing of “Appreciable Prejudice” Required Because Insured Violated Consent to Settle Provision

September 21, 2021

Via: JD Supra

The United States Court of Appeals for the Third Circuit, applying New Jersey law, has held that an insurer can deny coverage under a claims-made policy, without demonstrating “appreciable prejudice,” if the insured fails to comply with a clear condition precedent to coverage requiring the insurer’s written consent before agreeing to settle a claim. Benecard Servs., Inc. v. Allied World Specialty Ins., 2021 WL 4077047 (3d Cir. Sept. 8, 2017). The court also held that several exclusions barred coverage and that the insured could not maintain a bad faith claim against the insurers unless it established coverage in the first instance.

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