How Early Conversations About Counsel Selection Can Prevent Claims Disputes

When litigation strikes, one of the most contentious issues between insurers and policyholders is who gets to pick the defense attorney. While many policies grant insurers the right to select counsel, failure to communicate this upfront can result in costly disputes, angry clients, and even allegations of bad faith. Proactive, transparent conversations at the underwriting stage can prevent months of avoidable conflict.

Insurers should not assume that policy language alone will carry the day. Particularly in commercial lines, clients may expect to use their own high-priced attorneys or distrust panel counsel selected by the insurer. Addressing these expectations during policy placement—before a claim ever arises—allows insurers to manage perceptions, clarify rights, and avoid future misunderstandings.

Most policyholders are open to insurer-appointed attorneys, especially when the benefits—such as proven legal expertise, claims alignment, and cost efficiency—are clearly explained. However, commercial clients may harbor skepticism due to fee biases, existing legal relationships, or concerns about attorney loyalty. By educating clients and brokers on the advantages of panel counsel, insurers can build trust and reduce friction when litigation does occur.

The key takeaway for claims and underwriting professionals is simple: five minutes of uncomfortable, proactive conversation today can prevent five months of depositions and disputes tomorrow. Integrating counsel selection discussions into standard placement procedures isn’t just smart—it’s essential for minimizing claim friction, preserving carrier-policyholder relationships, and avoiding costly legal blowback.