For goodness sake, if you did not already know that it is a good and necessary thing for your clients, get a release! Here's why, reprinted with permission from the 2018 Supplements to Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith (3d edition, Thomson Reuters):
The following article is reprinted from Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith, Third Edition (Thomson Reuters). Further reproduction of this article without the express consent of the publisher is prohibited.
§ 5:58. Release
Many cases of alleged Third-Party Insurer Bad Faith involve previous settlement arrangements and Releases with varying effects between liability insurance companies and their policyholders. These situations often arise, for example, in cases involving Director's and Officer's Coverage Claims.
Whenever a Release was previously given by the policyholder or other insured to the insurance company, which arguably bars recovery from the insurance company based upon the same conduct now alleged in a later case, it should of course be raised as a defense in the later Bad Faith case.1
Westlaw. © 2018 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.
Footnotes
National Heritage Found., Inc. v. Philadelphia Indem. Ins. Co., 2012 WL 5331570 *5–*7 (E.D. Va. October 25, 2012) (previous Settlement Agreement with Release barred policyholder's recovery of defense costs from D&O insurer incurred by policyholder in litigation against policyholder, but did not bar recovery of settlement amounts paid by policyholder to settle litigation against it).
And here is the pdf: Download 5_58 PDF REC'D FROM TRW 08.22.18..
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