The U.S. Fifth Circuit Court of Appeals held that an insurer must show that an unnamed additional insured knew or should have known of the insurance policy at issue and of the consent to settle provision in order to enforce such a provision. Netto v. Atl. Specialty Ins. Co., 929 F.3d 214, 217 (5th Cir. Jul. 2, 2019).

A passenger in an automobile owned by a county government was injured in an automobile accident while acting in the scope of his employment with the county. He was not a party to the policy between the county and its insurer but was an unnamed additional insured under its terms. The at-fault vehicle was allegedly uninsured. The passenger’s attorney sought unsuccessfully to contact the county’s insurer, but ultimately negotiated a settlement with the at-fault driver and the Mississippi Workers’ Compensation Trust, which was approved by the Mississippi Workers’ Compensation Commission. Months later, the passenger’s attorney learned the identity of the insurer and submitted a letter directly through the insurer’s website that informed that a settlement had been reached. The passenger and his wife then sued the insurer, which moved for summary judgment based on a violation of a “consent to settle” provision in the policy. The court denied the motion and the insurer appealed.

The Mississippi Supreme Court has never considered the enforceability of a “consent to settle” provision in an uninsured motorist policy against an unnamed additional insured. If the passenger were a named insured, the provision would have very clearly barred recovery. But the Supreme Court has distinguished named and unnamed insured status with respect to a variety of policy exclusions and on whom the burden of establishing is placed. As a result, the Fifth Circuit held that the district court properly ruled that the record lacked evidence indicating the passenger’s knowledge of the “consent to settle” provision, and as a result, affirmed the denial of summary judgment.