Question

Which of the following statements is NOT true?

(A) If a question of coverage arises and cannot be swiftly resolved in favor of the insured, the carrier should immediately tender the claim to its defense attorney and deny the claim.

(B) If a lawsuit is filed and served upon an insured, the insured must immediately tender the lawsuit to the insurer or it may jeopardize the carrier's ability to defend the claim, and the insured's rights to coverage under the policy.

(C) A carrier has the right, but not the duty, to settle any claim if it deems reasonable and prudent to do so.

(D) Under a liability insurance policy, a carrier's duty to defend is greater than its duty to pay.

Answer 1

The statement that is NOT true is that a carrier has the right, but not the duty, to settle any claim if it deems reasonable and prudent to do so.

Step-by-step explanation:

The statement that is NOT true is:

(C) A carrier has the right, but not the duty, to settle any claim if it deems reasonable and prudent to do so.

Under a liability insurance policy, the carrier has a duty to defend the insured, which means they must provide legal representation and pay for the insured's legal costs in a lawsuit. The duty to defend is greater than the duty to pay. The carrier cannot simply choose to settle or not settle a claim as they see fit.