Opinion ID: 1383123
Heading Depth: 2
Heading Rank: 2

Heading: Excess Carrier's Duty to Settle

Text: KMC also argues that the $7 million settlement was excessive and that National should bear some responsibility because it had the opportunity to settle the case for much less. Specifically, KMC points out that National did not respond to, suggest counter offers to, or even discuss the plaintiff's $3.6 million settlement demand presented weeks before the trial began. An insurer's duty to settle is independent of its duty to defend. 14 COUCH ON INSURANCE 3rd §§ 203:12-203:13; 1 WINDT, supra § 5.26, at 350. An excess insurer owes its insured a duty to accept reasonable settlements, but that duty is also not typically invoked until the primary insurer has tendered its policy limits. 1 WINDT, supra § 5.26; Cf. Employers Nat'l Ins. Co. v. General Accident Ins. Co., 857 F.Supp. 549, 554-55 (S.D.Tex.1994)(when excess liability is likely, an excess insurer may interject itself into settlement negotiations before tender by the primary insurer). Here the primary insurer did not tender its limits until the trial began, well after the $3.6 million demand had been withdrawn. National did not assume control of the defense before INA tendered its limits and had no duty to evaluate the $3.6 million settlement demand until after that tender. Accordingly, National's failure to respond to the settlement demand is not evidence of its contributory negligence or comparative fault.