In Texas, for many years insurance companies have had the obligation to protect the interests of their insureds and settle cases if an insurance company using ordinary prudence would do the same. This law was important because the insurance comanies could protect their own interests while sacrificing the interests of their insureds - unless the law made the insurance companies liable for the full measure of harm they caused if they did this.  The law became muddied when the Texas Legislature changed the law for medical malpractice cases in 2003. Because of the cunfusing and just plain poor drafting of the new statute the insurance companies claimed their obligations were limited to the same damages caps that protected the docutors and hospitals - giving them free rein to abuse the system with no downside. The recent Bramlett decision proves the insurance companies wrong by restoring the teeth that the law was supposed to have by preserving the ability to pursue an insurance company when it failed to settle a case to the detriment of its insured. Read the decision here.

Comments are closed.