Legal Defence, Settlement and Allocation Sample Clauses
The 'Legal Defence, Settlement and Allocation' clause outlines how legal defense costs, settlement decisions, and the division of liability are managed when a claim arises under the agreement. Typically, this clause specifies which party is responsible for defending against legal actions, who has the authority to approve or negotiate settlements, and how expenses or damages are allocated if multiple parties are involved. Its core practical function is to ensure clarity and prevent disputes by establishing clear procedures and responsibilities for handling legal claims and their associated costs.
Legal Defence, Settlement and Allocation. 5.2.1 As a condition precedent to the right to be indemnified under this Policy, the Insured (and any person, firm, or company acting for or on the Insured’s behalf) must not incur any Defence Costs, admit liability for, compromise, settle or make any offer or payment in respect of any Claim, Circumstance or other matter for which coverage is provided under this Policy without the Underwriters’ prior written consent, such consent not to be unreasonably withheld or delayed.
5.2.2 The Insured shall defend any Claim brought against the Insured; however, the Underwriters shall have the right but not the duty to take over the investigation, defence and settlement of any Claim or Circumstance, and the Underwriters shall have full discretion in the handling thereof (notwithstanding that a dispute may have arisen between the Insured and the Underwriters ).
5.2.3 The Insured shall not be required by the Underwriters to contest any legal proceedings unless a Senior Counsel (to be mutually agreed upon by the Underwriters and Insured and in the absence of such agreement to be determined by the President of the New Zealand Law Society), shall advise that such proceedings can be contested with a reasonable prospect of success. The cost of such advice shall be regarded as part of the Defence Costs.
5.2.4 If the Insured does not agree with a decision by the Underwriters to settle a Claim, the Insured can elect to contest the Claim at its own expense but the liability of the Underwriters will not exceed the amount for which the Claim could have been settled in the opinion of a Senior Counsel (to be mutually agreed upon by the Insured and the Underwriters and in the absence of such agreement to be determined by the President of the New Zealand Law Society). The Underwriters shall pay all Defence Costs incurred up to the date the Insured notifies the Underwriters in writing of its election under this section, and shall pay the Insured (subject to the Excess) the amount for which the Claim could have been so settled. The Insured expressly agrees that the Underwriters’ liability in respect of such Claim shall then be at an end.
5.2.5 This Policy shall provide coverage only for covered Damages and Defence Costs. In the event of a Claim which involves covered and non-covered matters or covered and non-covered parties, the Insured and the Underwriters agree to use their best efforts to determine a fair and proper allocation of Damages and Defence Costs covered under this Policy, ...