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The Texas Supreme Court has issued a significant opinion explaining the when an insurer may have to pay a judgment under the state’s insurance law, even when the insurer wasn’t a party to the case. (Photo: Shutterstock)

This story is reprinted with permission from FC&&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

Although the U.S. has a reputation as a litigious society, in reality judges often encourage parties to a lawsuit to settle. And when insurers defend their insureds, settling a case is a reasonable trial strategy to limit court costs and attorney fees. What happens when the plaintiffs reach an agreement with the defendant before trial not to pursue all available assets if they win? Then, when a judgment is rendered against the insured in the trial in which the insurer doesn’t participate, must the insurer provide coverage?

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