What is the “right to independent counsel” in insurance and how does it protect policyholders’ rights? What are the practical ramifications of a defense provided by insurance company-appointed counsel, as opposed to “independent counsel” selected by the policyholder but paid for by the insurance company pursuant to an obligation to defend or to pay defense costs? How does a policyholder activate these protections?
What Is Independent Counsel?
In an ordinary matter where a defense attorney is provided by an insurance company to defend the policyholder, the attorney is often appointed with little or no input from the policyholder client. This is common in auto liability and homeowner liability cases. In such cases there often are: no reservations of rights to deny coverage; no above-policy-limits exposure to liability; and no difference of view regarding strategy and tactics to defend or resolve the matter. Such run-of-the-mill claims often do not give rise to a dispute regarding independent counsel because in such a context both the insurance company and policyholder often have virtually identical interests related to the defense of the matter.
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