Common use of Liability and Payment Clause in Contracts

Liability and Payment. The Reinsurer shall be responsible for the handling of, and all costs and expenses relating to, the contest, compromise or litigation of claims under the Reinsured Policies which arise after the Effective Date. The Company will not contest, compromise, or litigate a claim with respect to a Reinsured Policy unless delegated to do so in writing by the Reinsurer. Notwithstanding the foregoing, the Reinsurer shall have no liability for costs and expenses for any litigation arising out of or based on any bad faith claims practices, willful misconduct, fraud or gross negligence of the Company (without attributing to the Company the actions of the Reinsurer).