Thereafter, you then have liability issues- a carrier can tender its policy limit and walk away from the defense obligation any time it wants. That might be $100k for a someone with severe burns and millions of medicals costs.
That's not necessarily true, and certainly not true in my state. The insurance company cannot just tender the policy limits and walk away. The duty to defend is broader than the duty to indemnify. If you had one claimaint, and the carrier offered its $100,000 limits, and the plaintiff rejects the offer, then the carrier still has to defend the claim. Obviously, with one claimaint, if the claim is settled for policy limits, then you, the insured, are golden.
Now, when their are multiple claimants, with limited coverage, it gets more complicated. There is an obligation to the insured to use reasonable care to adjust the claim, and to attempt to reduce the potential exposure as much as possible. So, if you have some big claims, the adjuster might reasonably settle out the claims that he can manage to get settled, exhausting the limits, even if that means there is nothing left to settle the remaining claims. But even so, there is probably a duty to still defend those claims. There might be an exception if the aggregate limits had been exhausted prior to the claim, rather than the per occurence limit. But the carrier isn't simply allowed when faced with an accident to just tender its per occurence limits and walk away with no concern for the insured.
And the carrier can't just interplead the funds and walk away either. That would buy them a big fat bad faith/negligent claims handling claim by their insured. The interpleader action only divies up the funds tendered by the carrier, but wouldn't result in a release of the insured. Thus, that action would be an egregious breach of the duty to the insured.
