Insurers Must Careful When Considering Suing Counsel Appointed to Defend an Insured

Read the full article at https://www.linkedin.com/pulse/video-explaining-what-happens-when-retained-defense-zalma-esq-cfe-1c and See the full video at https://youtu.be/NOylKfx7tMo and at https://zalma.com/blog plus more than 3550 posts. 

There appears to be a growing trend in the United States where insurers file malpractice suits against counsel retained to defend their insureds. When an insurer retains a defense lawyer to represent its insured only to find they are incompetent or committed malpractice in providing the defense, rather than admit the error in choosing a poor lawyer for the insured the insurer sues the lawyer for malpractice seeking reimbursement for the amount paid to indemnify the insured.

Where the insurer retained defense counsel and there was no reservation of rights, courts have allowed the primary insurer to bring a cause of action against the attorney for malpractice, finding that the attorney represents the insurer, along with the insured, where they have common interests.

Insurance defense counsel must manage their potential exposure to suits brought against them by insurers who ask them to defend insureds.