The Insurer’s Duty to Provide Independent Counsel in California

April 3, 2013:  The most recent article for “Burke’s Law,” a monthly column featured on, discusses the duty of an insurer to provided independent counsel in California.  California has taken an intermediate approach to the issue, requiring insurers to provide independent counsel only when an actual and significant conflict arises.

Insurers often have a duty to defend the insured in litigation involving a claim under the policy.  Generally, the insurer and insured share a common interest in minimizing the liability of the insured.  However, when these interests diverge and a conflict arises, insurers are required to provide independent counsel for the insured.  In California, this principle was first recognized in the landmark case, San Diego Fed. Credit Union v. Cumis Ins. Soc’y, 162 Cal. App. 3d 358 (1984), which held that any reservation of rights issued by an insurer created a conflict requiring independent counsel.  But the Cumis decision was broad, and subsequent case law and legislation narrowed the insurer’s duty.  The state legislature enacted Civil Code Section 2860 which codified the duty to provide independent counsel but provided little guidance on when a conflict arises requiring independent counsel.  California courts interpreting the statute have held that a reservation of rights alone is not enough and have restricted the duty to cases where an actual and significant conflict arises.

States span the spectrum on the issue, but California has struck a middle ground, offering a statutory framework that protects policyholders from certain actual and significant conflicts but that is limited in scope and largely favorable to insurers.

The article can be read here: