If hired counsel improperly or inadequately defends the insured, a legal malpractice claim may arise against the attorneys or firm hired by the primary insurer. (Photo: Shutterstock)
In a typical third-party claim, an insurer hires counsel to defend its insured in a separate, underlying lawsuit. Sometimes, in a less common scenario, the insured's counsel is ineffective, perhaps even negligent, and a considerable verdict is entered against the insured. Assuming the insured's policy provides coverage, the insured is generally not responsible for paying this verdict. Rather, this responsibility falls on the insurer.
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