May 2012 Archives

What is "Cumis Counsel" and Do I Need One?

By: Kenneth W. Chung

A lawsuit is filed against Broker Bob and his seller alleging that they both were aware of a water leak under the slab but didn't disclose the problem to the buyer. The lawsuit alleges fraud and negligence against Broker Bob. Bob sends the lawsuit to his E&O insurance company. He then receives a "Reservation of Rights" letter from the insurance company stating that they have appointed one of their panel attorneys to represent him. The letter also states that the insurance company is reserving its rights to deny coverage and seek reimbursement of legal fees paid for the defense if a judgment is later obtained based on fraud since fraud is not covered by insurance.

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