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... &O policy. Since the duty to defend is broader than the duty to indemnify, another policy might contribute to the cost of the defense if there is a potentially covered cause of action, even if the possibility is remote. A court of appeals recently held that a workers compensation policy carried a duty to defend a civil action alleging emotional distress from a wrongful termination. La Jolla Beach & Tennis Club, Inc. v. Industrial Indemnity Co. (1993) 19 Cal.App.4th 358, 23 Cal.Rptr.2d 656. This rather extreme case shows there frequently is no harm in pursuing marginal coverage theories. Appointment of independent "Cumis" counsel when there is a reservation of rights and defense counsel can affect the outcome on coverage. If there are potentially uncovered claims, if an ... &O carrier that has a duty to defend the agent reserves its rights as to some claims, and if defense counsel can affect the outcome on the coverage issue, then the agent (within certain limits) has the right to have his own attorney defend the suit, at the expense of the carrier. Calif. Civil Code Section 2860. The right to "Cumis Counsel" has sometimes been badly abused in the past. The right has now been limited by the Civil Code. In a proper case, however, a lawyer who does not regularly receive defense cases from the E&O carrier can sometimes do a more effective job for the agent than a regular member of the carrier's defense panel. 4.3 Business claims. 4.3.1. Trade secret claims. The ...

...ful termination. La Jolla Beach & Tennis Club, Inc. v. Industrial Indemnity Co...