Insurers Lose Bid to Duck Coverage Claim Over Police Chase Crash

A Munich Re unit can’t knock out a Chicago suburb’s claim that the insurer made a bad-faith failure to settle an underlying lawsuit over a 2016 car crash during a police chase, a federal court ruled.

The Village of Dolton alleged Munich Re’s American Alternative Insurance Corp. and a Markel Group Inc. unit providing excess coverage both refused to settle the case within their policy limits. That was sufficient to support its bad-faith claim against the carriers, the US District Court for the Northern District of Illinois said Tuesday.

The underlying suit was brought against Dolton by the estate and ...