It is not uncommon for business litigation to involve insurance companies. In some instances, an insurance policy may provide coverage or a defense for litigation, such that an insurance company may pay the reasonable fees incurred by the policyholder’s defense counsel. A client may be able to select their own counsel, or sometimes the insurance company selects an attorney to represent the client—then the insurance company contributes to the legal fees.

This can be a complex relationship by which insurer and policyholder can share a privilege, but where the insurer may have the right to control or direct the defense. Thus, attorneys may not always sufficiently appreciate their obligations to insurance companies and may assume that their only duties flow to the clients. Indeed, defense counsel can get into trouble—or risk the rights of their clients—by failing to treat insurance companies fairly in these situations.