Michigan Laws 500.2204 – Settlement of action brought by third party against person insured under commercial liability insurance policy; notice to insured required
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 500.2204
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- person: may extend and be applied to bodies politic and corporate, as well as to individuals. See Michigan Laws 8.3l
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
Prior to a trial, an insurer shall not settle an action brought by a third party against a person insured under a commercial liability insurance policy issued by the insurer, unless the insurer gives the insured notice of the settlement at least 10 days prior to the settlement. As used in this section, “commercial liability insurance” means insurance which provides indemnification for commercial, industrial, professional, or business liabilities.