Advanced Duty to Defend

1) Introduction of speakers
2) Reasons topic is important
3) Importance of open dialogue in claims
4) The duty to defend is broader than duty to indemnify
5) Eight corners rule
a) Consideration of extrinsic evidence
b) Sources of extrinsic evidence
6) Notice
7) Recap
8) Quiz – Reinforcing Part I Materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Reservation of rights preserves coverage defenses
2) Reservation of rights letter pointers
a) Selectively quote policy language
b) Avoid jargon
3) Reservation lf rights letters can create a conflict of interest leading
to independent counsel
4) Right to withdraw and recoup defense costs
5) Different types of independent counsel
a) Paid for by the insured
b) Paid for by the carrier on behalf of the insured
6) Common situations where independent counsel is required
a) Negligent vs. intentional
b) Sequential acts
c) Portion of damages not covered
d) Noncompliance with policy conditions
7) Recap
8) Quiz – Reinforcing Part 2 Materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Must pay on an as-incurred basis
2) Insured’s right to waive independent counsel
3) Independent counsel’s rates too high
&nbsp&nbsp&nbspa) Use negotiation
&nbsp&nbsp&nbspb) Compromise in the middle
&nbsp&nbsp&nbspc) Insured can make up the difference
4) Burden shifts if initial coverage decision was wrong
5) Independent counsel performing unnecessary work
&nbsp&nbsp&nbspa) Only pay for costs that are reasonable and necessary
&nbsp&nbsp&nbspb) Review carrier’s litigation guidelines upfront
6) Recap
7) Quiz – Reinforcing Part 3 Materials
&nbsp&nbsp&nbspa) 5 multiple choice questions
&nbsp&nbsp&nbspb) 4 choices per question
&nbsp&nbsp&nbspc) A second quiz if less than 80% score on first quiz

1) Encourage the insured to hire a competent independent counsel
2) Benefits and burdens of independent counsel
&nbsp&nbsp&nbspa) Cons: cost and reporting issues
&nbsp&nbsp&nbspb) Pros: bad faith allegations are weaker
&nbsp&nbsp&nbspc) Carrier’s right to meaningful status updates
3) No such thing as insured-insurer privilege
4) Tripartite relationship
5) Privilege in independent counsel situation
&nbsp&nbsp&nbspa) Common interest doctrine
&nbsp&nbsp&nbspb) Use confidentiality agreements
6) Recap
7) Quiz – Reinforcing Part 4 Materials
&nbsp&nbsp&nbspa) 5 multiple choice questions
&nbsp&nbsp&nbspb) 4 choices per question
&nbsp&nbsp&nbspc) A second quiz if less than 80% score on first quiz

1) Multiple years of coverage and multiple carriers
&nbsp&nbsp&nbspa) Share the defense costs
&nbsp&nbsp&nbspb) Fund and fight agreement
2) Sending defense counsel’s fees to auditors
3) Allocating costs to the insured
&nbsp&nbsp&nbspa) SIR
&nbsp&nbsp&nbspb) Fronting insurance
&nbsp&nbsp&nbspc) Insured went bare
4) Paying for non-covered claims
&nbsp&nbsp&nbspa) Majority: pay for related uncovered claims
&nbsp&nbsp&nbspb) Minority: parse out
5) Counterclaims
&nbsp&nbsp&nbspa) Offensive: do not pay
&nbsp&nbsp&nbspb) Defensive (“inextricably intertwined”): pay
6) Recap
7) Quiz – Reinforcing Part 5 Materials
&nbsp&nbsp&nbspa) 5 multiple choice questions
&nbsp&nbsp&nbspb) 4 choices per question
&nbsp&nbsp&nbspc) A second quiz if less than 80% score on first quiz

1) Primary insurer incurs the defense costs
&nbsp&nbsp&nbspa) Very few exceptions to the rule
&nbsp&nbsp&nbspb) Can encourage excess carriers to participate
2) Must defend to the bitter end
&nbsp&nbsp&nbspa) Interpleader action is sometimes a possibility
3) Targeted Tender (IL)
4) Insured settles on its own (FL)
5) Conclusion
6) Recap
7) Quiz – Reinforcing Part 6 Materials
&nbsp&nbsp&nbspa) 5 multiple choice questions
&nbsp&nbsp&nbspb) 4 choices per question
&nbsp&nbsp&nbspc) A second quiz if less than 80% score on first quiz