Leaders in Law 2018: Asking Insurers to Pay for Defense of Litigation
Liability insurance can help companies decrease the financial burden of litigation. When an insurer agrees to participate in the defense of litigation there are certain practical points that all insureds should keep in mind to maximize their protection.
For example, if a company’s insurer agrees to defend it without any “reservation of right,” meaning that the insurer has fully accepted coverage and hired a lawyer to defend the insured, (1) the insurer generally gets to pick the lawyer, and (2) the insured generally should have very little expectation that its conversations with the retained lawyer are privileged vis a vis the insurer. In other words, if the insurer has fully accepted coverage, and the insured has a frank discussion with its lawyer about the case, the insurer generally is entitled to know about the conversation. And, even if the insurer has access to this “privileged” information, it remains protected with respect to others, such as the underlying plaintiff.
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“Leaders in Law 2018: Asking Insurers to Pay for Defense of Litigation,” by Linda D. Kornfeld and Julia K. Holt was published in the Los Angeles Business Journal on October 10, 2018.