Where a reservation of rights creates a conflict, several states require the insurer to fund counsel the insured selects. California's Cumis rule is the best known formulation, with statutory conditions on rates and qualifications.
Not every reservation triggers the right.
Alternative Names:
Independent Defense Counsel, Insured-Selected Counsel
Why it Matters?
The trigger is a conflict where the manner of defending affects coverage, not merely the existence of a reservation, which is the distinction carriers rely on. A reservation on an issue the defense cannot influence, such as whether the policy period covers the loss, does not create the conflict. Where the reservation concerns intentional conduct that defense strategy could develop or avoid, the right typically attaches.
Frequently Confused with
Related terms
Frequently asked questions
Does every reservation of rights trigger the right?
What reservation does not trigger it?
