Ever since the U.S. Court of Appeals for the Second Circuit decided Zeig v. Mass. Bonding & Insurance Co. in 1928, it has been well-settled that a policyholder can compromise a disputed claim with its insurer for less than the full limits of the policy without putting its rights to excess coverage at risk.
USA, Insolvency & Restructuring, Insurance, Litigation, Pillsbury Winthrop Shaw Pittman LLP, Surety, Liability (financial accounting), Second Circuit, United States bankruptcy court