The standard of liability for alleged Bad Faith settlement conduct by First-Party Insurers in many jurisdictions, including in Florida for example, is reasonableness:
The legal standard governing an insurer's settlement conduct is one of reasonableness. D. Wall, Litigation and Prevention of Insurer Bad Faith § 9.03 (1985).
Download Cruz v. American United Insurance Co. (Fla. 3d DCA 1991).
California Insurance Law provides another example of a jurisdiction in which this objective standard of liability is in effect. Download Bosetti v. United States Life Insurance Co. (Cal. 2d DCA, Div. 3 Opinion Filed July 17, 2009), attached Official Slipsheet Opinion at 40.
See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 9:3 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement in process West Publishing Company).
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