Ethical Duties of Insurance Defense Counsel to Preserve Coverage

This CLE webinar will discuss the ethical and practical duties and obligations of counsel appointed to defend the policyholder with respect to preserving coverage for the policyholder. The program will discuss ABA Formal Opinion 08-450 and related Model Rules of Professional Responsibility, what appointed counsel is expected to know about coverage issues, and how appointed counsel could structure discovery to avoid coverage issues in various types of cases. The program will also consider estoppel and the legal obligations of an insurer that has obtained from defense counsel information that supports denying coverage when defense counsel was unaware it did so.

Appointed counsel owes duties of competence, loyalty, and confidentiality to the insured it is defending. Appointed defense counsel can share with insurance carriers information about the cases they have been retained to defend, but that authority is not unlimited. The policyholder must be advised of these limits, and consent obtained to share potentially negative information.

Counsel must recognize information that could affect coverage, regardless of the source, and take proactive measures to keep it confidential, while still complying with obligations owed to the insurer. If assigned counsel unwittingly provides the insurer with information that it could use to support denying coverage, the insurer may be estopped to use it.

Appointed counsel may need to employ discovery plans and strategies that avoid coverage issues. Special difficulties can arise if the policyholder, after full disclosure, wants to pursue coverage to which it is not entitled.

Listen as this experienced panel discusses the ethical and practical duties and obligations of counsel appointed to defend the policyholder with respect to preserving coverage for the policyholder.