Legal Question in Personal Injury in Illinois

Possibly. You need to take a copy of your policy and the reservation of rights letter sent to you by the insurer to an attorney for review.

Will I be responsible for any award above the policy limit?

It would be extremely unusual for you to have any personal exposure given what facts you have related. Ever since 1945, in Olympia Fields v. Bankers Indemnity, once a demand has been made within the policy limits, should the carrier take the case to trial and lose, they would be responsible for the excess. Either you, or your attorney should write to the insurance company politely state that it is their duty to resolve your case within the policy limits in accordance with Olympia Fields. Every insurer in Illinois understands this letter and it guarantees your personal assets will almost certainly not be exposed should the case go to verdict in excess of your limits.

I should also point out that punitive damages are not covered in Illinois. Obviously, every case is different, so you probably have a lengthy discussion with your defense lawyer over the settlement demand and it's implications. He or she works for you, not the insurance company and has an ethical duty to keep you informed.