On January 24, 2014, the Pennsylvania Supreme Court agreed to hear an appeal from the Pennsylvania Superior Court's Order in Babcock & Wilcox Co. v. American Nuclear Insurers, 2013 Pa. Super. LEXIS 1640 (Pa. Super. Jul. 10, 2013). The Superior Court had ruled in Babcock & Wilcox that an insured cannot seek reimbursement for a settlement negotiated without the insurer's consent when the insured tendered and the insurer accepted coverage subject to a reservation of rights. See Thomas, C., " Whose Defense is it, Anyway – Consent to Settlement Clauses Under Babcock & Wilcox v. American Nuclear Insurers," August 29, 2013 Duane Morris Insurance Blog. The Pennsylvania Supreme Court's appellate review is limited to the issue of whether a policyholder forfeits coverage by settling a claim without the insurer's consent where the insurer is defending subject to a reservation of rights and the settlement was found to be fair and reasonable.
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