Variations: Extending Cover

8.01 The effect of a follow the settlements clause is ultimately an issue of contract interpretation.1 In order to ensure that the clause enables the reinsured to claim against the reinsurers in the satisfaction of the Scor provisos, it suffices for the reinsurers to agree to “follow the settlements” of the reinsured. Any variation to the words “follow the settlements” would be open to disputes as to the meaning of the clause and whether the reinsured has to prove actual liability in its claim against the reinsurers. Alternatively, the question may be whether the variations release the reinsured from the obligation of acting in bona fide and businesslike manner in settling the assured’s claim.