Insurance Defense Relationships

In California, when an attorney represents an insured client in a case where there may be a conflict between the interests of the insurer and the insured, the attorney must provide independent counsel at the insurer's expense. This is known as Cumis counsel, which ensures that the insured's interests are adequately protected without being compromised by the insurer's interests.

An insurance company is defending its policyholder in a lawsuit, but the insurer believes the claim is not covered under the policy. The insured's interests may conflict with those of the insurer, so the insurer must provide independent counsel for the insured to ensure their rights are protected. As a result, the insured receives proper legal representation without the insurer's influence.

When conflicts arise, Cumis counsel protects the insured's rights at the insurer's cost.

Exams may present scenarios where the insured's interests are subtly compromised, leading students to overlook the need for independent counsel. Students might also confuse the roles of the insurer and insured in these situations.

Questions typically involve fact patterns where the insurer and insured have conflicting interests, prompting candidates to identify the need for Cumis counsel and the implications of Civil Code § 2860.