Category: Stowers Duty

On September 3, 2015, the Texas Supreme Court heard oral arguments in what might be one of the most important
Stowers-related
decisions of the decade.
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This is the third installment in an eight-post series examining common
“Stowers myths,”
which can obscure application of an insurance company’s duty to behave in
a reasonably prudent manner in responding to settlement demands. If you are beginning here, you may want to
visit the first post, here,
to learn more about the basic parameters of the Stowers doctrine.
MYTH
#3 ▪
The insured can make a Stowers demand that triggers an insurer’s duty to
...
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In this eight-post
series, we are examining the most common “Stowers myths” that sometimes confuse
the practical application of an insurance company’s duty to behave in a
reasonably prudent manner in responding to settlement demands. If you are new to the series, you may want to
start here, at the beginning, to learn more about the basic parameters of the Stowers
doctrine.
MYTH #2 ▪ The settlement demand must be in writing to
trigger the ...
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When an insurance
company fails to act reasonably in rejecting or failing to respond to a
settlement demand, it may be subject to extra-contractual liability under the long-standing
Stowers doctrine. First articulated more
than 80 years ago in G.A. Stowers Furniture Company v. American Indemnity
Company, 15 S.W.2d 544 (Tex. Comm’n App. 1929), the common-law Stowers duty applies when:
(1) the claim against the insured is within the scope of coverage; (2)
the demand for sett ...
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