Judge JACOBS dissents in a separate opinion.
CARDAMONE, Circuit Judge:
We confront on this appeal whether an insurance company acted in good faith when it refused to settle a negligence claim against its insured. Because of the company's refusal, judgment was entered against the insured for the amount by which the plaintiff's award exceeded the policy limits. Although an insurance company has a contractual obligation to defend its insured, it also has a contractually...
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