Privilege and Work Product
Attorney-Client Privilege
When an insurer defends under a reservation of rights and the reservation creates an actual conflict, the insured may be entitled to counsel of its own choosing at the insurer's expense. The name derives from a California decision, and California codified the right by statute.
The conflict must be actual rather than theoretical, typically arising where coverage turns on facts defense counsel could influence.
Alternative Names:
Independent Counsel, Conflict Counsel
Why it Matters?
The entitlement depends on whether the reservation creates a genuine conflict, which is a narrower category than any reservation. The classic example is a case where coverage turns on whether conduct was intentional, since defense counsel could steer the verdict toward the uncovered theory. Carriers control cost exposure by drafting reservations precisely and, where possible, avoiding reservations that implicate facts the defense will develop.
Frequently Confused with
Related terms
Frequently asked questions
Does every reservation of rights trigger independent counsel?
Who pays for independent counsel?
