The Tripartite Relationship: The Insured, The Insurer and Legal Counsel

By Chip Gentry

“Mark Downing,” the owner of Marked-Down Windows LLC, walked into my office last week and informed me that a laborer had been injured while installing one of his company’s windows. “I’m sorry to hear that, Mark. You have liability coverage, right?” I asked.

“Yeah, I’ve got coverage through my carrier, Frugal Inc. I think we have enough coverage, but it has been like pulling teeth to get them to resolve matters in the past, and I don’t ever like any of the attorneys they hire to defend my company,” Mark commented.

“Well, why don’t you hire personal counsel to represent your interests?” I suggested.

“Chip, I just told you, I already have a lawyer,” Mark exclaimed. “I heard you, Mark, but that lawyer represents your company while simultaneously maintaining an ongoing relationship with your liability carrier. You need personal counsel.”


The terms of just about every liability insurance coverage policy state that the carrier will supply an attorney to defend the insured (your company) in legal action. In that scenario, your company is the lawyer’s client, and his or her loyalty and obligations are to protect your company’s interests. However, at the same time, that lawyer is hired (and paid) by the insurance company, and therefore has a financial interest in maintaining that relationship. While you may be the client, the lawyer also doesn’t want to bite the hand that feeds them: the insurance company.

The relationship between the hired attorney, you and your company, and the insurance company is referred to as the tripartite relationship. Most companies simply “settle” for the attorney hired by the insurance company, and trust them to solely represent their interests. As with Mark, I often encourage my glass company clients to hire personal counsel if they are unhappy with the representation hired by the insurance company, and especially if the claim for injuries or damages likely approaches or exceeds the policy limits of their coverage.


Personal counsel will represent your interests only by encouraging the insurance company to resolve the matter within your policy limits and advising you of additional rights you may have under the terms of the policy or applicable law. For example, in my home state of Missouri, a statute permits the insured (your company) and the injured party to enter into a so-called “065 agreement” in which the injured party assigns his or her claim to your company in exchange for promising to not go after any of your company’s personal assets. In practicality, the agreement turns the case from the perspective of an injured victim to one against an insurance company who may or may not be representing your company’s interests “in bad faith.” This legal right is unlikely to be suggested by the defense attorney hired (and paid) by the insurance company, even if it is the best option for your company.

“Wow, I never would have thought of that,” Mark stated. Often times the attorney hired by the insurance company does a serviceable job representing you and your company’s interests. However, if you are unhappy or unsatisfied with such representation, or if the attorney just isn’t a “good fit” with you and your company, consider hiring personal counsel to represent your interests. It’s never a bad idea to have additional representation, and I encourage all of my clients to do so in the event their company gets sued for injuries, property damage or some other cause of action.

Charles A. “Chip” Gentry is a founding member of Call & Gentry Law
Group in Jefferson City, Mo. He can be reached at

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