Australia Insurance Contracts Act 1984 (Cth) s41: s 41 Liability insurance: answer the insured's request about admitting the claim and conducting the defence

Where a liability contract requires the insurer's consent before the insured settles, compromises, admits or pays a third party claim, and the insured (or a third party beneficiary) gives written notice requiring it, the insurer informs them in writing within a reasonable time whether it admits that the contract applies and whether it will conduct negotiations and proceedings. If it does not confirm both, it cannot refuse or reduce the claim because the insured then settled or admitted liability without consent.