AXIS Insurance Company v. American Specialty Insurance & Risk Services

In an insurance coverage matter, the plaintiff sought indemnification from the defendant for claims that the plaintiff settled. The insurance contract did not require plaintiff to give defendant a choice between approving the settlement or assuming defense of the claims, but the defendant argued that Indiana law required that plaintiff do so. The district court agreed with the defendant and granted summary judgment in its favor. The Seventh Circuit reversed, explaining that insurance companies bargain for the rights and obligations that they hold in a contract, including a promise of indemnification, and that while the contract required that plaintiff provide notice of the settlement the plaintiff otherwise retained control over settlement decisions. The Seventh Circuit further explained that Indiana case law did not hold that the tender of defense was an implied condition in an indemnification agreement and the law instead respected the freedom to contract. (ROVNER and JACKSON-AKIWUMI, concurring)