Wednesday, December 28, 2005

Fourth Circuit issues opinion on effect of reservation of rights letter

In Twin City Fire Insurance Company v. Ben Arnold-Sunbelt Beverage, the Fourth Circuit considered whether, under South Carolina law, a reservation of rights letter automatically triggers a conflict of interest entitling the insured to reject counsel tendered by the insurance company and instead to choose and retain its own counsel and to have the insurance company pay for that counsel.

The panel agreed with the district court and rejected the notion that the reservation of rights letter issued in this case creates a per se conflict that must be remedied through the insured selecting counsel and having the insurance companies pay the legal fees.

No comments: