Can a seller insist on controlling the defence of a claim instead of letting me settle it myself?

Often yes for a third-party claim, though this is a negotiated feature of the indemnity procedure rather than an automatic right. Because the seller may ultimately be the one paying for the outcome of a third-party claim covered by the indemnity, purchase agreements commonly give the seller the right to assume and control the defence, using counsel of its choosing, once it has confirmed it will indemnify the buyer for the claim, which makes practical sense from the seller's perspective as the party bearing the financial risk.

That right is usually balanced with protections for the buyer, such as the buyer's ability to participate in the defence at its own cost, a requirement that the seller act diligently and in good faith, and, commonly, a rule that the seller cannot settle a claim without the buyer's consent if the settlement does not fully and unconditionally release the buyer or involves an admission of wrongdoing on the buyer's part. Whether the seller actually has this control, and how far it extends, depends entirely on the specific procedure written into the agreement, which is worth reviewing closely before a third-party claim actually arises.