(2) the insured wins, meaning both the insured and the insurer bear no liability. If the first outcome occurs, then it is essentially "nothing gained nothing lost" from the insurer's point of view, because either way it will pay out its policy limits. (For simplicity, this analysis disregards sunk costs in the form of defense costs incurred to that point, as well as additional costs sustained by the insurer in defending the insured to a verdict at trial, and opportunity costs sustained by the insured while participating in trial.) While the insurer may be indifferent in this scenario as to whether it pays out its policy limits before or after trial, the insured is most certainly not. If the first outcome above were to occur, the insured may be held liable to the plaintiff for a sum far in excess of both the pretrial settlement offer and the policy limits. Then after the insurer pays out its policy limits, the plaintiff may attempt to recover the remaining balance of the judgment by enforcing writs of attachment or execution against the insured's valuable assets. This is where the duty to settle comes in. To discourage the insurer from gambling with the insured's assets in pursuit of the remote possibility of a defense verdict (under which it can avoid having to pay the plaintiff anything at all), the insurer is subject to a duty to settle reasonably clear claims. The standard judicial test is that an insurer must settle a claim if a reasonable insurer, notwithstanding any policy limits, would have settled the claim. This does not require an insurer to accept or pay settlement offers that actually exceed policy limits, but in that instance, the insurer must discharge its duty to settle by at least making an attempt to bring about a settlement in which it would have to pay only its policy limits (either because the plaintiff agrees to lower their demand or the insured or another primary or excess insurer agrees to contribute the difference). Effects of breach Generally, an insurer who breaches any of the foregoing duties will be held liable for breach of contract. In most jurisdictions, the result is a judgment requiring payment of the insured's expectation damages—the sums that the insurer should have paid under its duty to indemnify. But this will be circumscribed by the policy limits, and will generally not compensate the insured