After the accident, Standard Fire identified three potential claimants: Baldwin, Hopkins, and McCarty. Baldwin sued the Hummels and made a time-limited settlement demand for the $50,000 per-person policy limit. Standard Fire, which controlled all settlement decisions under the policy, rejected Baldwin’s demand. The insurer determined that both Baldwin’s and Hopkins’ claims were likely to exceed the $50,000 limit, and settling with Baldwin risked exhausting the $100,000 policy limit, potentially leaving McCarty without recourse.