United States: Can Defense Panel Counsel Effectively Handle Insurance Claims? Part One. (Video Content)

Last Updated: June 29 2016
Article by Mark Miller

What insurance carriers have recently done to prevent large law firms from pursuing insurance coverage claims against them is perhaps one of the most brilliant strategic legal moves ever orchestrated.  And, it is also one of insurance law's dirtiest little secrets.   The end result is that virtually none of the large prestigious laws firm practicing in the United States can effectively pursue claims against insurance carriers.  In today's video post, Mark Miller examines some of the factors that policyholders should be aware of before they seek insurance claims advice from defense counsel. 

One of the least publicized ways that insurance carriers control the legal market is through their relationship with defense panel counsel.  Virtually every large prestigious law firm is now on panel counsel for at least one major insurance carrier.  The reason for this is that a large portion of corporate defense work is paid by insurance carriers.  Insurance companies pay large law firms tens or even hundreds of millions of dollars to defend claims under their policies.  Naturally, corporate litigators want their fair share of this work, and to get it, their law firm needs the blessing of the insurance carriers that control and pay for that work.  Insurance carriers, likewise, need to trust panel counsel that serves them.  It is only natural for insurance companies to regulate panel counsel firms.   

In the good old days, insurance companies understood that panel counsel law firms might need to sue them, occasionally, so they permitted panel counsel to pursue certain kinds of claims against them.  Those days, however, are long gone.  A number of years ago, insurance carriers rightfully realized that if they could either eliminate large law firms from suing them, or control how those firms pursued claims against them, they might gain a strategic advantage with respect to insurance claims.  What large law firms had years ago was the old adage, "don't bite the hand that feeds you."  They pursued claims against insurance carriers, but were careful not to pursue those claims vigorously, or else they risked losing insurance company defense work.

Insurers have changed that old adage now to, "if you try to bite us, we will vigorously bite back."   Now, panel counsel may attempt to handle claims behind the scenes, but, they are keenly aware that they are in a difficult situation.  Large law firms may still advise policyholders on corporate insurance claims, but they function now only as advisors.  When policyholders ask defense panel counsel firms for insurance claims advice, they are entering into a match where the opposing team controls the players for both sides.   It may be interesting to watch, and it may look like things are going well, but it is not a fair fight.  Moreover, the relationship seldom permits effective negotiation and settlement of claims.  This kind of situation ends well only if the corporate policyholder is willing to settle for far less than they are entitled. 

In this video, the first of a two part series, we address these and other issues that corporate policyholders face when defense counsel are asked to investigate an insurance claim.  Watch the video to learn all about it.

For a transcript of the video please see below:

Can Defense Panel Counsel Effectively Handle Insurance Claims?  Part One.

There is different levels to this and that is how do insurance companies control or regulate their panel councils so that those council don't turn against them and file a big lawsuit against them. They control this in a number of different ways. 

Years ago, most insurance companies realized that we are all big boys and girls and we all know the law firms are noble, they will represent a client, sometimes they will be for you, sometimes they will be against you. So, we will give you a written waver and no big deal. If you want to sue us, we don't like it but we will give you the waiver, well that all stopped a number of years ago, the waivers are much more difficult to get and they are very limited in scope.

The idea that you can both represent an insurance company or be on panel counsel and then sue or be adverse to an insurance company is sort of a grey area. So, on the insurance company side they have tied the strengths over the years. If you are going to be on panel counsel you are going to have some sort of an agreement.

Why would a law firm sign that agreement? Quite frankly, its advantageous to be on panel counsel if you are defending big cases, I mean you want to be the person listed that the insurance company will pay for because the client will be happy and you can practice law and do a good job doing it. 

So, you want to be on that list if you are an important lawyer at a big law firm. So, what they do is that, there is an agreement, you can have an agreement if you are a panel counsel and somebody in the law firm it's going to sign it and it's going to control what you can do. Sometimes these agreements set forth you can't do certain things and other times it's just understood you can't do certain things.

For years, it was just understood that if you are an AIG panel counsel you could sue AIG, if you're gutsy enough but you have to give them a heads up before you sue them and you couldn't sued them and you couldn't sue them for bad fate and you damn well better not be aggressive in that law suit because that's just uncomfortable for AIG (American International Group).

If you are at a big law firm an you need to sue AIG you would call the AIG's liaison and the AIG liaison would say, "Hey do you mind if I give them a heads up, they are going to get sued, we can't we can't sue them without telling them about it.

You might say as a lawyer doing the insurance work well, there is a big issue with form and  choice of form, by that, we need to be in this jurisdiction to win, if we are in this jurisdiction over here, we lose. So, and you're saying, "I don't know if it's okay to tell the insurance company we are going to sue them and why do we have to?"

Well, that is what you would say is a policy holder lawyer and on the flipside, the other guys like, "How can it harm anybody, we are just telling them that we are going to sue them and give them a little bit of time to get ready of it."

Then on the other side you are thinking if you are the policy holder lawyer you are like, "What do you mean give them time to think about it, they are going to strategize and do something it's not right?"

Anyways that's the dynamic and it does happen. Let's say you get through that and you do sue them, this is a situation that happens as well. Well, you are looking at the claim and you are saying, "You know what, this is really bad conduct, this is a legitimate bad faith claim, I need to make that claim for my client."

So, talk to the client, client gets all fired up, they're ready to file a bad faith law suit, amend the law suit for bad faith, go for punitive triple damages and everything else and make this a really exciting case and they are happy to do it and they want to do it. So, you're at one of one of these  big law firms and you say, "Okay, we are ready to go, we are going to file a bad faith case," What happens? You can't file it. What do you do? It's uncomfortable. You got to go back to the client and say, "Yeah, you know what? I can't do it." What does the client say? "What the hell are you talking about?"

 "What do you mean you can't do it?" So, that's the kind of dynamic that happens and of course there's ways around that, you can hire bad faith council, you can do this, you can do that, but at the end of the day, the insurance company is upset, your law firm is not going to get as much business or they going to get cut off.

Miller Friel, PLLC is a specialized insurance coverage law firm whose sole purpose is to help corporate clients maximize their insurance coverage. Our Focus of exclusively representing policyholders, combined with our extensive Experience in the area of insurance law, leads to greater efficiency, lower costs and better Results. Further discussion and analysis of insurance coverage issues impacting policyholders can be found in our Miller Friel Insurance Coverage Blog and our 7 Tips for Maximizing Coverage series.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.