## Q11 key (Time-Limited Demand)
1. The insurer owes a defense to the entire action: the negligent hiring, training, and security count rests on conduct independent of the excluded battery (no background check, no policy, understaffing), and any potential coverage triggers a full defense. Missed: the client absorbs defense costs it is owed.
2. Late notice does not rescue the insurer: prejudice is the insurer's burden and none is showable (pre-deposition posture, witnesses available, video preserved). Missed: a paper-tiger defense drives the client's decisions.
3. The reservation of rights creates a classic conflict: the same "pursuit" facts that defeat coverage would be developed by insurer-appointed defense counsel; Harborline is entitled to independent counsel at the insurer's expense and should demand it in writing. Missed: the coverage case is quietly built inside the defense file.
4. The demand triggers the insurer's excess exposure: liability is reasonably clear on defense counsel's own 60-to-70 percent, $1.4-to-$2.6 million evaluation, and $950,000 is within limits and reasonable; rejection or expiry exposes the insurer to the full judgment. Missed: the client's single greatest lever is never pulled.
5. The Wednesday letter is the material act: a written demand that the insurer accept the $950,000 by Friday, reciting the evaluation, the within-limits character, and that Harborline will hold the insurer responsible for any excess judgment; copy the broker; demand independent counsel in the same letter. Missed: the excess-judgment setup is never perfected.
6. Harborline must not settle directly with Teel while a defense is being provided; that forfeits indemnity under supplied rule 7. The direct-settlement option matures only on wrongful denial. Missed: the client converts a covered claim into an uncovered one.
7. The 50 percent contribution float is premature: no contribution before the insurer answers the acceptance demand; any later contribution must be documented as made under protest with full reservation against the insurer. Missed: $475,000 of leverage handed over for nothing.
8. The single defensible course: send the acceptance-demand and independent-counsel letter now, keep the demand alive if possible, and contribute only as a last resort under written protest. Missed: Friday passes and every option worsens.