Liability insurers have become increasingly concerned over the possibility that they may be responsible for satisfying excess judgments. This concern is justified. In Crisci v. Security Insurance Co., the California Supreme Court generated new developments in insurance law by predicating an insurer's liability for failing to settle claims against its insured upon a finding of mere negligence. Traditionally, an insurer was held liable for an excess judgment only if the insured was able to bear the burden of showing that the company acted in "bad faith" in failing to settle a claim. Virginia adopts this traditional view.
Barbara A. Dalvano,
Insurers' Liability for Excess Judgments in in Virginia: Negligence or Bad Faith?,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol15/iss1/6