The Georgia Supreme Court recently held in First Acceptance Ins. Co. of Georgia, Inc. v. Hughes, 826 S.E.2d 71 (Ga. 2019) that a liability insurance company’s duty to settle arose when a valid settlement demand was presented by the injured party that fell within the insured’s policy limits. Only under those circumstances did an insurer risk breaching that duty if it rejected a reasonable settlement demand. This case involved a multiple vehicle traffic accident which resulted in one fatality and the injury to five individuals. The insured’s policy limits were $25,000 per person/$50,000 per accident and were insufficient to fully compensate all of the injured parties. Because of this, the insurance company sent the injured parties’ attorneys a letter proposing a joint settlement conference/mediation to resolve all claims. The Georgia Supreme Court found that as a threshold matter the insurer’s duty to settle arose only when the injured party presented a valid offer to settle within the insured’s policy limits. As support for its conclusion that “sound” policy supported the making of a written settlement demand as a prerequisite to a liability insurer’s duty to settle. The court noted that without an offer within the policy limits, the only evidence of an essential element of the insured’s case – that the insurer could have settled the case within the policy limits – would be “after-the-fact testimony of the injured party that he would have settled within the policy limits. Such testimony was unreliable and often self-serving or the product of collusion between the insured and the injured party.