The Texas Supreme Court focused on two thorny insurance issues in arguments last week, revisiting a case that it decided in 2005 and tackling questions handed off by the 5th U.S. Circuit Court of Appeals.
On Feb. 15, the Supreme Court considered whether an insurance company has an extra-contractual right to be reimbursed for an uncovered claim if the insured never agreed to the reimbursement. In its 7-0 decision in Excess Underwriters at Lloyd’s, London, et al. v. Frank’s Casing Crew & Rental Tools Inc. (2005), the court held that in certain circumstances, an excess insurance carrier that disputes coverage but that settled a claim against an insured can seek reimbursement for the settlement costs from the insured, even though the policy did not grant it the right to be reimbursed.
