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.
An interesting situation arises when the insured has both primary and excess coverage. The primary insurer hires the insured's counsel, and that insurer pays its share of the verdict. The excess insurer is also responsible for the verdict, and often pays significantly more than the primary insurer. In situations in which the verdict is a result of the negligence of the insurer's counsel, what recourse does the excess insurer have to recoup its payments? Can the excess insurer sue the insured's counsel, hired by the primary insured, for legal malpractice?
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
