A hospital’s excess carrier is suing the primary insurer in federal court in New Jersey for bollixing up settlement talks in a wrongful birth suit, allegedly in bad faith, thus increasing its exposure in a case that produced a $28 million verdict.

Lexington Insurance Co. alleges it was left liable for $9 million (later reduced to $4 million) because two settlement offers were spurned and a high-low deal excluded the excess carrier, to whom the primary insurer owed a duty.

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