Is it possible to obtain a settlement from a defendant’s primary insurance company without settling the entire case? Yes, this can be done with what is called a Deblon settlement, named after the case of Deblon v. Beaton, 103 N.J. Super. 345 (Law Div. 1968). In that case, the Appellate Division endorsed a release of liability against the defendants' personal assets and primary insurance carrier, while permitting the case to proceed against the excess carrier. In a Deblon settlement, in exchange for the primary insurance carrier tendering its policy (or a portion of it), the plaintiff gives up the right to collect a defendant's personal assets after a judgment, without giving up the right to continue the case, hold a trial, and collect a judgment from the defendant’s umbrella and excess insurance carriers.
When a plaintiff has a case worth significantly more than the value of the primary insurance policy, it can be advantageous to all involved in the case to enter into a Deblon settlement with the primary insurance carrier if there is enough excess or umbrella coverage to cover the value of the case, or if the defendant has minimal personal assets.
A Deblon settlement is good for plaintiffs, because they receive some money right away, which they can keep even if they lose at trial. It is also good for defendants, because their personal assets are protected from any judgment that exceeds the total insurance coverage amount, without any cost to them. These settlements also benefit the primary carrier, because they are protected from any bad faith claims and they are helping their client (the defendant) avoid personal liability. If the primary carrier knows that they will most likely be tendering the full policy anyway, then they have no reason not to tender it right away in exchange for the release from the plaintiff. The excess and umbrella carriers also have no reason to object to a Deblon settlement, since they are not the ones paying for it, and their client benefits from it.
However, if the plaintiff’s case value exceeds the amount of excess and umbrella coverage, and the defendant has significant assets, then it would not make sense for the plaintiff to limit their recovery to the amount of the policies in place. Likewise, if the primary carrier believes that liability is uncertain or the verdict may be lower than the primary policy limits, then the more sensible strategy for the primary carrier is to take the case to trial. But in cases where liability and damages are strong, but within the limits of the excess and umbrella policies, everyone benefits from a Deblon settlement.