Even when carriers agree to defend an insured, policyholders and
carriers can still get locked into disputes about who will provide
such a defense. Policyholders often want to choose their own
counsel while a carrier has its own idea about
style='text-decoration: underline;'>who should defend
the case. The dispute in Travelers Property v. Centex
Homes, C10-02757 (N.D. Cal. April 1, 2011) illustrates this
problem and shows how a dispute over defense counsel can
potentially lead the carrier to argue that the policyholder has
breached its duty to cooperate and that such a breach relieves the
carrier of both its duty to defend and indemnify under the
policy.
In Travelers Property v. Centex, the dispute arose
after Centex tendered the defense of two construction defect
actions to Travelers. Travelers acknowledged receipt of the
tenders within a week but requested additional information from
Centex regarding the underlying claim, defense counsel rates, and
the
