SRM, Inc. v. Great American Insurance

MORITZ, Circuit Judge.

Under Oklahoma law, a primary insurer owes its insured a duty to initiate settlement negotiations with a third-party claimant if the insured’s liability to the claimant is clear and the insured likely will be held liable for more than its insurance will cover. Here the insured, SRM, Inc., seeks to extend this obligation to its excess liability insurer, Great American Insurance Company. Specifically, SRM claims that Great American breached its insurance policy and duty of good faith and fair dealing by not proactively investigating claims against SRM and by refusing to…