THE RESTATEMENT OF THE LAW OF LIABILITY INSURANCE AND THE DUTY TO SETTLE

More than sixty years ago, Judge Robert Keeton authored what has come to be the definitive exegesis on the insurer's duty to settle.(1) Judge Keeton was followed some twenty-five years later by Professor Kent Syverud with what has come to be the second definitive work on the insurer's duty to settle.(2) Since that time, a scattering of articles have addressed the duty to settle but none have done so in Syverud's comprehensive way. The occasion of the American Law Institute's ("ALI") project, the Restatement of the Law of Liability Insurance, initiated five years ago, provides the opportunity to revisit the insurer's "duty to settle." The ALI's aim for the Restatement of the Law of Liability Insurance is to "cover[] the law of contracts in the liability insurance context, liability insurance coverage, and the management of insured liabilities."(3) Using Professor Syverud's piece as a baseline and Judge Keeton's piece as background, this Article focuses on the project's substantive changes to the existing rules regarding an insurer's "duty to settle."