What is the implication of failing to settle claims where liability is reasonably clear?

The implication of failing to settle claims where liability is reasonably clear primarily lies in the potential influence this failure can have on settlements under other portions of the insurance policy. When an insurer does not settle a claim that they reasonably should, it creates an environment of mistrust and can negatively impact the claims process for other policyholders or claims. This situation may lead to longer resolution times and increased legal costs, which ultimately could influence how other claims are perceived and handled.

In cases where claims processing is inefficient or where avoidable delays occur due to a lack of settlements, it can strain relationships with our policyholders and affect future claims decisions. Furthermore, such situations might prompt policyholders to request a reassessment, which could lead to additional scrutiny over how claims are managed. Overall, the failure to settle clearly defined claims can have cascading effects on an insurer's overall policy framework and its relationships with insured parties.