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This article discusses the circumstances in which an insurer can pursue a malpractice claim against defense counsel retained for an insured. It explains that the majority of courts have allowed insurers to bring such claims and outlines the three primary legal vehicles through which insurers can do so. The article also addresses the split of authority regarding how insurers can seek reimbursement of defense costs from the insured if it is later found that the insurer did not owe a duty to defend. It provides practical considerations for insurers pursuing reimbursement and policyholders looking to fend off a demand for recoupment. The article concludes by stating that there is no one-size-fits-all answer for insurers seeking to recover indemnity or defense payments, as these determinations are jurisdiction-specific and fact-driven. [Extracted from the article]

When an insurer accepts an insured's tender and agrees to provide a defense, it is often an afterthought as to whether the insurer can actually recoup those defense costs or indemnity payments from the insured or defense counsel if things go south. When Can an Insurer Pursue a Malpractice Claim Against Defense Counsel Retained for an Insured? Three legal theories support recovery: (1) the tripartite relationship between insurers, insureds, and retained defense counsel; (2) the insurer as a nonparty beneficiary of the relationship between the insured and retained defense counsel; and (3) subrogation. If defense counsel are handling other claims for the carrier, a claim against defense counsel could chill or otherwise impair communication in connection with the other pending claims and may require those claims be moved to new defense counsel, which could be expensive, time-consuming, and strategically disadvantageous. [Extracted from the article]