Bill > A03889

This bill amends the New York insurance law to establish new protections for insureds (policyholders) in liability insurance cases. Specifically, the bill requires that if a liability insurance company receives a settlement offer within its policy limits and chooses to reject that offer, and the case subsequently results in a legal verdict that exceeds those policy limits, the insurance company becomes fully responsible for paying the entire excess amount. Importantly, the bill also prohibits the insurance company from attempting to recover this excess judgment from the insured person, which means the policyholder would be shielded from financial liability beyond their original policy limits. This provision is designed to incentivize insurance companies to act in good faith during settlement negotiations and protect policyholders from potentially devastating financial consequences if a lawsuit judgment far exceeds their insurance coverage. The amendment would be added to Section 3420 of the New York insurance law and would take effect immediately upon passage.

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https://www.nysenate.gov/legislation/bills/2025/A3889