# Defense and Supplementary Payments (continued)

2. In those instances where paragraph 1. above does not apply, 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 investigation, settlement or defense of any suit or proceeding which relates to any occurrence that we feel may create liability on our part under the terms of this policy.

3. Regardless of anything stated in paragraphs 1. and 2. above, we will not defend any suit after we have exhausted the applicable Limit of Insurance as stated in Item 4 of the Declarations.

B. When defense and supplementary payments of:

1. any underlying insurance reduce the limits of insurance provided by that policy, then any such expense payments made under this policy will reduce the Limits of Insurance provided by this policy; or

2. none of the underlying insurance reduce the Limits of Insurance provided by those policies, then any such expense payment made under this policy will not reduce the Limits of Insurance provided by this policy.

C. We will only pay the following expenses:

1. 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 Limits of Insurance, then we will pay the interest on the part of the judgment to which this policy applies.

2. Expenses incurred directly by this Company and at the sole discretion of this Company.

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

However, if we make an offer to pay the applicable Limits of Insurance, prior to judgment, we will not pay any pre-judgment interest that accrues after our offer.

# Limits of Insurance

A. The Limits of Insurance shown in Item 4 of the Declarations and the rules below determine the most we will pay, regardless of the number of:

1. insureds;
2. claims made or suits brought;
3. coverages provided under this policy; or
4. persons or organizations making claims or bringing suits.

B. The Limits of Insurance of this policy will apply as follows:

1. Only in excess of the underlying limits of insurance specified in Item 5 of the Declarations.