When an insurer agrees to pay a sum of money to a third party in exchange for the third party giving up his or her legal right to pursue litigation against the insured,this is called a(n) ________.

A) settlement
B) reservation of rights
C) declaratory judgment
D) indemnification

Settlement

An agreement reached by parties in a lawsuit before the case goes to trial or a final judgment is issued.

Litigation

The process of taking legal action or engaging in a lawsuit to resolve disputes between parties.

Legal Right

Entitlements or permissions under the law that can be enforced or recognized by legal institutions.