¶ 55. {concurring). Although I join the other parts of the majority opinion, I conclude, as did the circuit court, that Cedarburg Mutual Insurance Company is not subject to double costs and interest under Wis. Stat. § 807.01(3), (4) for litigating whether Richard Leuck had coverage under his insurance policy. Because the majority opinion concludes otherwise and in the process unreasonably forces an insurer in Cedarburg’s position to settle before it can fully and fairly assess its liability for damages, I respectfully concur.
¶ 56. There can be little doubt that Wis. Stat. § 807.01 exists to encourage parties to settle their cases rather than take them to trial. Beacon Bowl, Inc. v. Wisconsin Elec. Power Co., 176 Wis. 2d 740, 501 N.W.2d 788 (1993); DeMars v. LaPour, 123 Wis. 2d 366, 373, 366 N.W.2d 891 (1985). To the extent that § 807.01 forces parties to carefully analyze their realistic chances of liability or recovery and reevaluate the merits of taking their case to trial, the statute serves an important purpose. Settlement is to be encouraged rather than discouraged in the law.
*156¶ 57. Yet, the virtues of settlement are not-unbounded. While Wis. Stat. § 807.01 exists to encourage settlement, it cannot be employed to unreasonably force settlement. Nelson v. McLaughlin, 211 Wis. 2d 487, 517-18, 565 N.W.2d 123 (1997) (Abrahamson, C.J., dissenting); White v. General Casualty Co. of Wisconsin, 118 Wis. 2d 433, 439-40, 348 N.W.2d 614 (Ct. App. 1984). As courts in this state have repeatedly said, a settlement offer unreasonably forces settlement when the recipient of the offer is not able to fully and fairly evaluate its liability. Nelson, 211 Wis. 2d at 504, 517-18; Blank v. USAA Property & Casualty Ins. Co., 200 Wis. 2d 270, 276, 546 N.W.2d 512 (Ct. App. 1996); Testa v. Farmers Ins. Exchange, 164 Wis. 2d 296, 302, 474 N.W.2d 776 (Ct. App. 1991).
¶ 58. The majority opinion unreasonably forces an insurer in Cedarburg's position to settle because that insurer cannot fairly and fully assess its liability. This is not a case in which an insurer is presented with an offer to settle but incorrectly guesses that it can get a lower dollar amount by taking the case to trial. See, e.g., Northridge Co. v. W.R. Grace & Co., 205 Wis. 2d 267, 288-89, 556 N.W.2d 345 (Ct. App. 1996); Testa, 164 Wis. 2d at 299-300. Rather, this is a case where the insurer had legitimate doubts about whether it even had a duty to provide coverage to its insured in the first instance. I do not see how Cedarburg could fully and fairly assess the amount of its liability for any wrongful actions attributed to its insured until it first knew if it would be obligated to indemnify its insured. Under the majority's analysis, what sort of choice does Cedarburg have? Only a Hobson's choice: either buy its way out of a suit to which it arguably had no financial obligations, or press for an answer to that question and risk double costs and interest.
*157¶ 59. The court of appeals in Oliver v. Heritage Mut. Ins. Co., 179 Wis. 2d 1, 18-20, 505 N.W.2d 452 (Ct. App. 1993), recognized that Wis. Stat. § 807.01 can be utilized in unreasonably coercive ways. While the facts of that case are not on all fours with the facts in this case, the underlying principle that formed the Oliver decision is what should form this one as well.
¶ 60. In Oliver an injured party offered to settle with an insurance company early in the litigation before the facts of the case were conclusively known. Id. at 18. At the time of the settlement offer, the insurance company could not know the extent of Oliver's contribution to his injuries because the facts of the case were not yet completely developed. Id. Later, when the insurance company learned that Oliver's part in his injury was relatively minor, it reassessed its risk and tendered the policy limit which Oliver then refused. Id. at 18-19. The court of appeals concluded that the penalties of Wis. Stat. § 807.01 were not applicable in that situation because the insurance company did what it should have done: upon discovering additional facts which altered its risk, it attempted to settle the case. Id. at 20.
¶ 61. The facts of this case are more compelling than Oliver.1 In Oliver the insurer knew that it would be financially responsible for any wrongful acts of its *158insured up to the policy limits but at the time could not assess the extent of its insured's misconduct. Here Cedarburg did not even know whether it would be financially responsible for its insured's actions. If the Oliver insurer was relieved from the penalties of Wis. Stat. § 807.01,1 cannot see why Cedarburg should fare any worse.
¶ 62. In sum, the majority opinion's imposition of double costs and interest on Cedarburg for determining whether it had a duty to indemnify its insured does not encourage settlement. It unreasonably forces settlement. As a result, consistent with the circuit court, I would not award double costs and interest to Prosser for the time and expense associated with litigating Cedarburg's duty to provide coverage for the actions of its insured. Accordingly, I respectfully concur.
¶ 63. I am authorized to state that CHIEF JUSTICE SHIRLEY S. ABRAHAMSON and JUSTICE DONALD W. STEINMETZ join this opinion.
I do not understand the majority's attempt at distinguishing this case from Oliver. Majority op. at 151. Contrary to the majority's assertion, the circuit court in Oliver must have determined that Oliver was entitled to double costs and interest prior to the insurer's tender of its policy limits because the court of appeals reversed that award. It would seem axiomatic that before Wis. Stat. § 807.01's penalties can be assessed, a court must determine that the party requesting such measures is entitled to them.