Illinois’ Targeted Tender Rule: An Important New Tool for Policyholders

Recent Illinois decisions have granted policyholders a unique right to select among primary carriers that owe them a defense. Under what has become known as the "targeted" or "selective" tender rule, an insured entitled to a defense from two or more primary insurers can designate a particular carrier to defend a suit. The selected insurer will owe the sole duty to defend the action and be precluded from seeking contribution from the nonselected insurer. The rule operates regardless of an other insurance clause in the selected insurer’s policy.1

This article recounts the development of the targeted tender rule. It explains that the rule has progressed beyond selective tender to include a right to withdraw a prior tender, even after a case has settled. It also observes that one court has held that the right to target can be overcome by specific policy language requiring tender to other insurers. Finally, it discusses three as yet unsettled questions about the rule: (1) whether