# DEFENSE

1. We will NOT be obligated to assume charge of the investigation, settlement or defense of any claim made, or suit brought, or proceedings instituted against you. We will, however, have the right to participate in the defense and trial of any claims, suits or proceedings which relate to any occurrence that we feel may create liability on our part under the terms of this policy. We will NOT defend any suit or claim after we have exhausted the Limit of Liability as stated in Item 4 of the Declarations.

2. a. When defense expense payments of any Underlying Insurance reduce the Limit of Liability provided by that policy, then any such expense payment made under this policy will reduce the Limit of Liability provided by this policy as stated in Item 4 of the Declarations.

b. When defense expense payments of none of the Underlying Insurance reduce the Limit of Liability provided by those policies, then any such expense payment made under this policy will NOT reduce the Limit of Liability provided by this policy as stated in Item 4 of the Declarations.

3. We will NOT pay any expense except as follows:

a. If the insured becomes legally liable for interest that accrues on a judgment after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable Limit of Liability, then we will pay the interest on the part of the judgment to which this policy applies.

b. Expenses that are incurred directly by this Company and at the sole discretion of this Company will be paid by this Company.

c. Pre-judgment interest awarded against the insured on that part of the judgment we pay.

If we make an offer to pay the applicable Limit of Liability, we will NOT pay any pre-judgment interest based on that period of time after the offer providing that all Underlying Insurance pays pre-judgment interest.

## LIMITS OF LIABILITY

1. Our total Limit of Liability for loss from any one occurrence will NOT exceed the amount specified in Item 4 of the Declarations.

2. Our Limit of Liability only applies in excess of the Underlying Insurance specified in Item 5 of the Declarations.