Settling a claim within policy limits

Russell G. Thonton, JD

From Stinnett, Thiebaud & Remington, LLP, Dallas, Texas.

Corresponding author: Russell G. Thornton, JD, Stinnett, Thiebaud & Remington, LLP, 4800 Fountain Place, 1445 Ross Avenue, Dallas, Texas 75202 (e-mail: rthornton@strlaw.net).

In many health care liability claims, especially after the parties begin to discuss a settlement, it is not unusual for plaintiffs to make a demand on the defendant health care provider to settle the claim within policy limits. In Texas, this demand is known as a Stowers demand, after the Texas Supreme Court case G. A. Stowers Furniture Co. v. American Indemnity Co., which recognized that a policyholder had a cause of action against his liability insurer for negligently refusing a settlement offer within policy limits. A Stowers demand is an important development in the case and requires action by the health care provider, his counsel, and his professional liability insurance carrier. This article describes the background of this doctrine, its application, and how to respond to such a demand. (BUMC Proceedings 2002;15:336-337)