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Civil Litigation -
Defense Through Your Insurance Company

Northern California Civil Litigation Information

If you are fortunate enough to have insurance coverage for your lawsuit, then your insurance company will probably hire an attorney to represent you, and you may not have to think about hiring an attorney on your own. If your insurance company provides for your defense, they will hire an attorney to represent you with respect to every aspect of your defense. Such an attorney is known as "insurance defense counsel." You shouldn't worry about hiring an attorney if your carrier has hired one for you, unless you are facing a liability exposure which exceeds your policy limits, or the insurance company is defending you subject to a "reservation of rights." These latter situations are discussed below.

There are some situations where, even though your insurance company has retained an attorney to defend you, you should still consult with another attorney who you personally retain. If your liability exposure exceeds your policy limits, that means you could be responsible for paying whatever damages exceed the limits of your policy. That uninsured exposure is your "personal exposure." In that situation, it may be worthwhile to hire your own attorney to monitor the case and make sure your insurance company does everything possible to settle the case within policy limits and thus eliminate your personal exposure. Of course, if the plaintiff will not make a settlement demand within your policy limits, then your options may be limited to: (1) taking the case to trial, and (2) settling the case by paying the difference between your policy limits and the plaintiff's demand.

If you face potential personal exposure (damages above your policy limits), it would be a good idea to retain your own attorney to help evaluate and resolve the case. Also, your insurance company owes you a "duty of good faith and fair dealing," which includes the duty to settle cases, where reasonably possible, within policy limits. If your insurance company rejects a reasonable settlement offer from the plaintiff that is within your policy limits, and the plaintiff later gets a verdict which exceeds the policy limit, then you may have grounds to demand that your insurance company pay the full amount of the verdict since they essentially gambled and lost with your money. While your insurance defense attorney might help you through that process, an attorney hired directly by you will be better suited to do so and will face no potential conflict of interest with your insurance company. This dovetails with another situation where you should have your own attorney which is discussed next.

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