Settled group covered in embarrassment (7)
I believe the answer is:
resided
'settled' is the definition.
(I've seen this before)
'group covered in embarrassment' is the wordplay.
'group' becomes 'side' (side is a kind of group**).
'covered in' is an insertion indicator.
'embarrassment' becomes 'red'.
'side' put inside 'red' is 'RESIDED'.
(Other definitions for resided that I've seen before include "stayed" , "Lived" , "Settled" , "Sojourned" , "Dwelt" .)