What is true about the insurer's obligations regarding defense in EPLI policies?

In Employment Practices Liability Insurance (EPLI) policies, the insurer typically has the right to settle claims without the insured's input. This reflects the principle that insurers have the duty to defend and, where appropriate, to manage the defense process on behalf of the insured party. This means that once a claim is made, the insurer can decide whether to settle it based on their assessment of the potential liability and the interests of the insured. This provision is important because it allows insurers to manage risk effectively and mitigate potential losses efficiently.

In many insurance agreements, while the insured may express opinions or preferences regarding defense strategies or settlement amounts, the ultimate authority usually rests with the insurer. This structure is designed to ensure that claims can be resolved promptly and prevent larger liabilities from developing.

The other options would not accurately reflect the typical terms found in EPLI policies. For instance, the idea that insurers have no right to investigate claims contradicts standard industry practices, as investigating claims is a fundamental responsibility of insurers. Furthermore, the insured does not have full control over the defense process, as the insurer usually retains that right, particularly when it undertakes the defense of the claim. Lastly, while insurers have a duty to defend, this obligation is strictly tied to the claims that fall