By Jan Larson and Catherine Doyle ( August 4, 2017, 4:35 PM EDT) -- The recent, pro-policyholder Ninth Circuit decision in Teleflex Medical Inc. v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, affirms the contractual obligation imposed upon excess insurers by the implied covenant of good faith and fair dealing to either contribute toward a reasonable settlement that invades its coverage layer or, alternatively, to take over the defense of the underlying claims. The Ninth Circuit rejects the notion that the "no voluntary payments" and "no action" provisions in an insurance policy provide the excess insurer with an absolute right to veto a reasonable settlement without taking responsibility for the defense. The well-reasoned opinion examines multiple California state cases as well as universal policy considerations in support of its holding. As the issues addressed in Teleflex are not widely addressed by settled case law in all jurisdictions, we hope to see the Ninth Circuit's reasoning in this opinion extended and applied to other jurisdictions in favor of policyholders facing similar disputes with their insurers....