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Insurance Companies and Intentional Acts

When defending someone who caused an injury to another seemingly intentionally, the attorney hired by the insurance company is in a difficult situation. The attorney has duties to the insured and his or her client, and to the insurance company. The attorney must advocate for both even though their interests aren’t entirely aligned.

There is a recent Nevada State Court decision called Hanson vs. State Farm, which said that if there is an insured where the attorney has an actual conflict of interest because of the allegations of the complaint or the defenses that are being presented, then the insured is entitled to hire independent counsel, and the insurance company has to pay for that. So, if the attorney hired by the insurance company is advocating to try to implicate the intentional tort exclusion to try to get the insurance company out of coverage, and the insured is hopefully aware of what is going on, he or she can demand the right to independent counsel. This should be paid for by the insurance company so that the insured can protect their interest and try to get proof that it was an accident, so that there is coverage.

The Hanson decision states that there has to be an actual conflict of interest which depends on the facts and circumstances of every situation.