Hamilton v. State Farm Insurance

The petitioner, State Farm Mutual Insurance Company, issued a public liability policy to the respondents, in which its liability was limited to $10,000 for injuries to any one person. The policy provided, in part:

[The company will] defend any suit against the insured alleging such bodily injury or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient; . . .

An action within the scope of the policy was commenced against the…