The Definitive Guide to Cumis Counsel

Cumis counsel refers to the independent attorney whom a defendant is entitled to retain in a liability insurance claim — where there is a conflict of interest between the defendant and the insurance company. The term Cumis Counsel originated in a 1984 California lawsuit between San Diego Federal Credit Union and Cumis Insurance Society, Inc..

In order to retain Cumis counsel, the insurance policy must provide for legal defense in a liability suit (i.e. the insurance company agreed to pay legal fees to defend the insured, unless the defendant is found to have acted contrary to, or outside of, the policy’s coverage). A conflict of interest would arise where an insurance company has appointed counsel to the defendant that is simultaneously defending the interests of the insurance company in a lawsuit wherein the insured person’s liability (and therefore extent of insurance coverage) is in question. Simply put, the defendant has a right to ensure his or her interests are not jeopardized by joint representation.

What is Cumis counsel?

The classic example of a conflict that requires Cumis counsel is a complaint that alleges negligent and intentional conduct.  Because liability insurance policies almost always exclude coverage for intentional conduct, the insurance company can avoid paying for the loss by proving that the insured acted intentionally, not negligently.  The insured, by contrast, will desire to prove the opposite — that any tortious conduct was negligent, not intentional.  Because the insurance company’s appointed lawyer cannot act in the insurance company’s best interests and the insured’s best interests at the same time, Cumis counsel should be obtained by the insured.

Does it only pertain to liability insurance claims and a conflict of interest?

Yes, Cumis counsel is limited to instances of liability insurance claims wherein there is a conflict of interest between the insured defendant and the insurer, who is responsible for providing legal representation to its client.

To this day, courts continue to address when the right to independent counsel under Cumis is triggered and what constitutes a conflict of interest. For example, in 2018, a California appellate court held that a potential conflict of interest is not necessarily sufficient to require the appointment of independent counsel. Instead, the conflict should be actual and significant. For the sake of simplicity, where the purpose of the claim is to verify facts that would determine fault by the insured, and those same, questionable, facts serve as the basis upon which coverage will be provided or denied, a conflict of interest is likely to exist.

How does California Civil Code Section 2860 relate to Cumis counsel?

California Civil Code Section 2860 sets forth legislation pertaining to Cumis counsel. It outlines the various elements of an insurer’s obligation to provide independent legal counsel to an insured client in circumstances where there is a potential conflict of interest between the two.

California Civil Code Section 2860 states that the insured party may expressly waive this right in writing, and that the insurance policy may include provisions regarding the process of obtaining independent counsel. It further describes what a conflict of interest entails, namely “when an insurer reserves its rights on a given issue and the outcome of that coverage issue can be controlled by counsel first retained by the insurer for the defense of the claim, a conflict of interest may exist.” Further, it outlines certain limitations, such as the insurance company’s right to require that any independent counsel meet certain professional qualifications and that the fees charged align with those that the insurance company pays to its own lawyers.

What is a reservation of rights letter? 

A “reservation of rights” letter is a letter from the insurance company notifying the insured that an investigation into a claim has begun and that the company reserves the right to ultimately deny coverage to the client depending on the final judgement, as well as demand that any legal fees paid be reimbursed should coverage be denied. In accordance with the terms of the policy contract, the letter should also state that the company will appoint an attorney to the insured client to represent him in the liability claim. The letter should provide sufficient information regarding the company’s coverage defenses so that the insured party can decide whether or not to use the appointed attorney or seek independent counsel. Importantly, where a conflict of interest has been identified, the reservation of rights letter must notify the insured of its right to Cumis counsel.

Note, however, if you’ve received a general reservation of rights letter, this does not automatically translate into you having the right to independent counsel. Instead, as mentioned above, there must be a conflict of interest, which arguably must be actual and significant, not simply a potential conflict of interest. The reservation of rights itself doesn’t create a conflict of interest.

What are the policy limitations on Cumis counsel, if any?

Legal fees for a liability claim are covered by the policy, where a liability insurance policy provides for the “duty to defend” the insured party, and where the underlying claim falls within the policy’s coverage.

In instances where an insured party is authorized to retain Cumis counsel, one might wonder if there are limits on the fees payable to the independent counsel, especially given that the insurance company is responsible for covering those costs? While the insurance policy itself will delineate the limitations, California Civil Code Section 2860 provides that any fees paid must align with the fees paid by the insurance company to its own attorneys “in the ordinary course of business in the defense of similar actions in the community where the claim arose or is being defended.” Moreover, the policy may include separate terms regarding fees that the legislation will not override. Lastly, should a dispute arise as to the fees charged, the policy will set forth the manner in which the dispute should be settled. If the policy doesn’t elaborate on this issue, the parties must resort to arbitration.

There is one exception to the above, however. Some liability insurance policies referred to as “self-consuming” or “burning limits” policies, are designed specifically to allow for legal defense fees to be part of a policy’s limits. This means that in some limited cases, a policy may not cover legal fees irrespective of the policy coverage limits and instead defense fees will reduce the policy’s limit.

Is there a time limit or statute of limitations?

There is no statute of limitations or time limit on the right to Cumis counsel, although it should be noted that an insured party is obligated to provide a timely response to any communication by the insurance company.

For example, after the insured party receives a reservation of rights letter from the insurance company, the insured party is likely to be obligated to respond in order to protect their coverage under the policy and avoid any potential breach of contract. This response should be carefully crafted with the help of a qualified attorney who will assist you in ensuring your response does not waive any of your rights to Cumis counsel.

Is there a template response to a reservation of rights letter?

We recommend that you contact an experienced insurance litigation lawyer to assist you in drafting your response. Why? A template response to a Reservation of Rights Letter will NOT address the specific items pertinent to your claim, NOR your insurance company’s reservation of rights letter.

When should I hire an insurance litigation attorney?

Contact an insurance litigation lawyer the moment you receive a reservation of rights letter and believe there may be a conflict of interest between you, the insured, and your insurer. It is important to act in a timely manner so that you do not risk violating the terms of your policy or losing coverage, including your right to Cumis counsel. Generally, the consultation should be free.

Do I need an insurance litigation attorney for a Cumis counsel legal malpractice claim?

As in any legal malpractice claim, you should seek an experienced insurance litigation attorney to represent you should you feel that your Cumis counsel failed to fulfill his legal duties to you. Specifically, if you think that your Cumis counsel acted negligently, breached his or her fiduciary duty, or breached the contract that you entered into with them, you should contact an insurance litigation attorney to discuss your options.

Do I need an insurance litigation attorney near me?

We recommend choosing an insurance litigation attorney who has experience serving as Cumis counsel in the jurisdictions where the case will be tried. For example, if the liability claim will be tried in Los Angeles Superior Court, we recommend working with one of our insurance litigation attorneys that is familiar with LASC judges and proceedings.


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About Brown Neri Smith & Khan, LLP

We are complex business litigation attorneys in Los Angeles. With backgrounds across complex law practice areas, and hailing from some of the world’s largest law firms, BNSK attorneys are experienced litigators successfully defending clients around the world. Our partners founded BNSK on the belief that successful client relationships are driven by our extensive experience, and our unmatched resolve to achieve successful results. For a free consultation, visit or call us at: (310) 593-9890