I neglected to post about this important Appellate Division, Third Department decision — Elacqua v. Physicians’ Reciprocal Insurers.   The decision concerns a coverage dispute regarding an underlying malpractice action against physicians and  a nurse practitioner who worked with the physician.   The coverage dispute issue is novel because the Court held that the defendant insurer was obligated to advise its insurers that they had a right to independent counsel of their own choosing in the underlying matter because a conflict of interest arose about coverage.  The insurer took the position that some of the claims in the underlying action were covered and some of the were not.

The decision seems to be a first in the Appellate Division for the proposition that an insurer has an obligation to inform its insurers that he or she has a right to hire independent counsel of his or her own choosing once a coverage conflict arises and is apparent to the insurer.