When people are sued, they are relieved if their insurance potentially will cover them for the claims alleged against them. They are more relieved when their insurance carrier agrees to defend them. Typically, tnsureds also will be pleased if their insurers agree to pay to settle the lawsuits, thereby precluding trials and any possible judgments against them.

Sometimes, however, insureds do not want their insurers to settle lawsuits because settlements would affect them or their business negatively. For example, insureds may not want to settle, because doing so would harm their reputations. A particular insured may be a physician or other professional who was sued for malpractice and may fear that a settlement will appear as a concession that he is guilty of malpractice.

What happens when insureds are sued and want to defend vigorously and not settle because they believe that the claims are frivolous or they want to reduce the possibility of opening the floodgates to copycat suits? Is the insurance carrier entitled to control whether a claim is settled, even over the insured's objection?