A third-party insurer cannot be sued for bad faith if it ultimately settles a case within policy limits even if it allegedly refused to settle a claim despite the insured’s admission of liability and instead engaged in “delay tactics” that led to four years of litigation, a federal judge has ruled.

In his 10-page opinion in Daniel P. Fuss Builders-Contractors Inc. v. Assurance Company of America, U.S. District Judge Berle M. Schiller predicted that the Pennsylvania courts would hold that there is no recognized cause of action against an insured for delaying settlement of a third-party claim.

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