Unenforceability against the insurer of the insured's settlement
The rule allowing the liability insurer to stipulate that no admission of liability or settlement made by the insured without it binds the insurer, an admission of a material fact not counting as such.
In liability insurance, the insurer funds the compensation owed to the victim: it therefore has an interest in controlling the discussion of liability and amount. Article L. 124-2 of the French Insurance Code allows it to stipulate that no admission of liability and no settlement made without it binds it. An insured who commits alone to the victim remains bound by that commitment, but the insurer is bound only to the extent that liability and amount would have been established without it. The text specifies that admitting the material facts cannot be treated as an admission of liability: the insured may describe what happened without losing cover. This rule combines with control of the defense, which most policies give the insurer, and with the notice of circumstances, which informs it upstream. In practice, it encourages the insured to involve the insurer in any negotiation with a claimant.
An architect who promises a client in writing in 2024 to pay 150,000 euros for water leaks cannot enforce that against the insurer; if the court-appointed expert later puts the damage at 90,000 euros, the insurer pays only 90,000 euros and the architect alone bears the difference.
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