Tripartite Insurance Relationships: Insurers, Insureds, and Insurance Defense Counsel

Summary

This practice note will discuss the fundamentals of the ''tripartite relationship.'' The term refers to the relationship between an insurer, an insured, and a defense attorney hired to defend the insured in a claim that an insurance policy may cover. The term ''claim'' refers to a lawsuit rather than to a legal or insurance dispute that has not reached that stage. Particulars discussed may vary by jurisdiction, so practitioners are advised to consult the law of the jurisdiction in which a claim arises for specific guidance. State-specific ethics rules governing attorney conduct may also be implicated. The defense may be provided by an independent attorney or firm hired by the insurer to defend the insured, or it may be a firm that is organizationally part of the insurer yet operates as an independent law firm. If independent of the insurer, the insurer pays it to oversee the defense.