Reservation of Rights
The Cumis doctrine is not without limit. Not every reservation of rights requires independent counsel. One court of appeal held that even if a liability insurer’s denial of coverage for punitive damages in an underlying defamation action against the insured could be construed as a reservation of rights, since the insurer remained liable for any compensatory damages which might be awarded, there was no conflict of interest requiring the insurer to furnish independent counsel to represent the insured.
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