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ivverdictgreensheetsVolume32013courtexplainedtheinsuredhasnotshownhowtheinsurersreservationofrightstodenycoverageforlossesarisingoutofagovernmentdemandtomonitorandcleanupsuchpollutiongivesrisetoaconictofinterestsincecounselcouldnotcontroltheoutcomeofthatinquiry.Additionallythefactthattheinsurerhadissuedpoliciestomorethanonedefendantinthecaseandprovidedseparatecounseltotheco-defendantsdidnotautomaticallycreateanyconictrequiringindependentcounsel.Finallytheappointeddefensecounselcouldnotcontrolthetimingofunderlyinglosseswhichcouldberelevanttoascertainingwhetherthelossesfellwithinaparticularinsurerspolicyperiod.SeealsoSwansonv.StateFarmGeneralInsuranceCo.2013219Cal.App.4th1153SecondDist.Div.SevenamaterialconictofinteresttriggeringinsurersdutytoappointCumiscounselexistsonlywhenthebasisforinsurersreservationofrightscouldcauseappointeddefensecounseltoassertfactualorlegaltheoriesaectingcoveragethatwouldbecontrarytopositionstheinsuredwouldasserttodefendagainstthethird-partyclaimtheinsurersdutytoprovideCumiscounselceasedtoexistwhentheinsurerwithdrewitsreservationofrightswhichrestoredtheinsurersrighttotakecontrolofthedefensewithanattorneyofitschoosingtheinsurerdidnotwaivethatrightbyfailingexpresslytoreserveit.SeealsoCarterv.EntercomSacramentoLLC2013219Cal.App.4th337irdDistemployeeaskedhisemployertopayfordefensecounselinanactionarisingoutoftheemployeesworkbuttheemployeerefusedthecounselappointedbytheemployeesinsurerwishinginsteadtohavecounselofhischoicethetrialcourtdeclinedtoawardrecoveryforfeesthedefendantpaidtohisattorneyndingtheywerenotnecessaryoncetheinsurerappointedcounselandtheCourtofAppealarmedholdingLaborCodeSec.2802dutytoindemnifyemployeefordefensecostsdidnotgiveemployeeanabsoluterighttoberepresentedbycounselofhisownchoosingevenwhenclaimsagainstemployeesoughtpunitivedamagestherewasnoreservationofrightsandnoconictgivenlackofmotiveonemployersparttoexposeemployeetopunitivedamages.Liabilityinsurerdoesnothaveadutyunderstandardpolicytermstodefenditspolicyholderagainstathird-partylawsuitseekinginjunctivereliefbutnocompensatorydamages.SanMiguelCommunityAssn.v.StateFarmGeneralInsuranceCo.2013220Cal.App.4th798.Insuredsinthisbreachofcontractandbadfaithactionsuedtheirliabilityinsurerforrefusingtoreimbursethemforthecostofdefendingtheearlystagesofalawsuitinwhichtheplaintishadinitiallysoughtonlyinjunctiverelieftoenforceparkingrestrictionswithinthecommunityplusanawardofpunitivedamages.Whenthethirdpartyplaintislateramendedtheirpleadingtoincludeaclaimforrecoveryofcompensatorydamagestheinsureragreedtoassumeappellantsdefensebutrefusedtoreimburseitforanydefensecostsincurredpriortotheamendment.etrialcourtenteredsummaryjudgmentinfavoroftheinsurer.einsuredsappealedarguingthattheinsurerhadanobligationtoprovidethemwithadefenseeveninabsenceofanyexpressclaimfordamagesintheearlierversionsofthethirdpartycomplaintbecausethoseearlierversionsimpliedthethirdpartieshadsueredcompensabledamagesasaresultofinsuredswrongdoingandthusdemonstratedapotentialliabilityfordamagescoveredunderthepolicy.eCourtofAppealFourthDist.Div.reearmed.Underthepolicythedutytodefendappliedonlytoclaimsorsuitsseekingdamagespayableunderthepolicy.epossibilitythatthethird-partyplaintismightlaterseekrecoveryofcompensatorydamageswasirrelevant.Whatmattersiswhetherthethirdpartyhassoughttorecoverdamagesfromtheinsured.Itisonlywhenthethirdpartydoesthatthatithasitmadeaclaimwhichtriggersevenpotentialcoverageunderaliabilitypolicy.atdidnotoccurhereuntilthethirdpartyplaintisamendedtheirpleadingtoincludeaclaimforcompensatorydamages.Moreovertheinsuredsclaimbasedontheinsurersallegedbadfaithinmanufacturingevidencefailsforthemostbasicreasonofall...aclaimforliabilitybasedonaninsurersallegedbreachoftheimpliedcovenantofgoodfaithandfairdealingcannotbemaintainedunlesstheinsuredwasentitledtocoverageundertheinsurerspolicy.Aninsurermustprovideadefenseeveniftheinsuredhasnotpaidthepolicysself-insuredretentionabsentclearlanguagetothateffectinthepolicy.AmericanSafetyIndemnityCo.v.AdmiralInsuranceCo.2013220Cal.App.4th1.Oneinsurerwhopaiddefensecostssuedanotherinsurerforequitablesubrogationbecausethedefendantinsurerdeclinedtodefendtheinsuredagainstunderlyingsoilsubsidenceclaimsnotingthattheinsuredhadnotyetpaidthe250000self-insuredretentionindefensecosts.etrialcourtruledthatthedefendantinsurerowedadutytoreimbursetheplaintifordefensecostsitpaid.eCourtofAppealFourthDist.Div.Onearmed.ThesubjectcommercialgeneralliabilitypolicyhasaprovisionlabeledSelf-insuredRetentionSIRthatclearlymakestheinsuredliablefortherst250000indamagespayabletoanythirdpartyclaimant.epolicyalsomakesitcleartheinsuredspaymentofdefensecostscounttowardmeetingtheinsuredsSIRobligations.HowevertheSIRclauseweareaskedtoconsiderdoesnotexpresslymakepaymentoftheSIRaconditionoftheinsurersbroaderobligationtoprovideadefensewhenanarguablycoveredclaimistendered.RathertheSIRclauseexpresslyappliesonlyasalimitationontheinsurersdutytoindemnifytheinsuredforcovereddamagesforwhichtheinsuredisfoundliable.GiventhelanguageofthepolicyaninsuredcouldquitereasonablyinterpretitasprovidingadefensetoarguablycoveredclaimsassoonassuchclaimsaretenderedandbeforeanySIRhasbeenpaid.edistinguishedprimaryinsurancepoliciesfromexcesspoliciesinwhichtheinsurergenerallyhasnodutytodefenduntiltheunderlyingprimarycoverageisexhausted.continuedfrompageiiiiverictgreenseetsVoume32013courtexplainedtheinsuredhasnotshownhowtheinsurersreservationofrightstodenycoverageforlossesarisingoutofagovernmentdemandtomonitorandcleanupsuchpollutiongivesrisetoaconictofinterestsincecounselcouldnotcontroltheoutcomeofthatinquiry.Additionallythefactthattheinsurerhadissuedpoliciestomorethanonedefendantinthecaseandprovidedseparatecounseltotheco-defendantsdidnotautomaticallycreateanyconictrequiringindependentcounsel.Finallytheappointeddefensecounselcouldnotcontrolthetimingofunderlyinglosseswhichcouldberelevanttoascertainingwhetherthelossesfellwithinaparticularinsurerspolicyperiod.SeealsoSwansonv.StateFarmGeneralInsuranceCo.2013219Cal.App.4th1153SecondDist.Div.SevenamaterialconictofinteresttriggeringinsurersdutytoappointCumiscounselexistsonlywhenthebasisforinsurersreservationofrightscouldcauseappointeddefensecounseltoassertfactualorlegaltheoriesaectingcoveragethatwouldbecontrarytopositionstheinsuredwouldasserttodefendagainstthethird-partyclaimtheinsurersdutytoprovideCumiscounselceasedtoexistwhentheinsurerwithdrewitsreservationofrightswhichrestoredtheinsurersrighttotakecontrolofthedefensewithanattorneyofitschoosingtheinsurerdidnotwaivethatrightbyfailingexpresslytoreserveit.SeelsoCarterv.EntercomSacramentoLLC2013219Cal.App.4th337irdDistemployeeaskedhisemployertopayfordefensecounselinanactionarisingoutoftheemployeesworkbuttheemployeerefusedthecounselappointedbytheemployeesinsurerwishinginsteadtohavecounselofhischoicethetrialcourtdeclinedtoawardrecoveryforfeesthedefendantpaidtohisattorneyndingtheywerenotnecessaryoncetheinsurerappointedcounselandtheCourtofAppealarmedholdingLaborCodeSec.2802dutytoindemnifyemployeefordefensecostsdidnotgiveemployeeanabsoluterighttoberepresentedbycounselofhisownchoosingevenwhenclaimsagainstemployeesoughtpunitivedamagestherewasnoreservationofrightsandnoconictgivenlackofmotiveonemployersparttoexposeemployeetopunitivedamages.atnsureroesnotaveautunderstandardolictermstodefenditsocoeraanstatr-artawsutseekininunctivereliefbutnocomensatoramaes.SanMiguelCommunityAssn.v.StateFarmGeneralInsuranceCo.2013220Cal.App.4th798.Insuredsinthisbreachofcontractandbadfaithactionsuedtheirliabilityinsurerforrefusingtoreimbursethemforthecostofdefendingtheearlystagesofalawsuitinwhichtheplaintishadinitiallysoughtonlyinjunctiverelieftoenforceparkingrestrictionswithinthecommunityplusanawardofpunitivedamages.Whenthethirdpartyplaintislateramendedtheirpleadingtoincludeaclaimforrecoveryofcompensatorydamagestheinsureragreedtoassumeappellantsdefensebutrefusedtoreimburseitforanydefensecostsincurredpriortotheamendment.etrialcourtenteredsummaryjudgmentinfavoroftheinsurer.einsuredsappealedarguingthattheinsurerhadanobligationtoprovidethemwithadefenseeveninabsenceofanyexpressclaimfordamagesintheearlierversionsofthethirdpartycomplaintbecausethoseearlierversionsimpliedthethirdpartieshadsueredcompensabledamaesasaresultofinsuredswrongdoingandthusdemonstratedapotentialliabilityfordamagescoveredunderthepolicy.eCourtofAppealFourthDist.Div.reearmed.Underthepolicythedutytodefendappliedonlytoclaimsorsuitsseekingdamagespayableunderthepolicy.epossibilitythatthethird-partyplaintismightlaterseekrecoveryofcompensatorydamageswasirrelevant.Whatmattersiswhetherthethirdpartyhassoughttorecoverdamagesfromtheinsured.Itisonlywhenthethirdpartydoesthatthatithasitmadeaclaimwhichtriggersevenpotentialcoverageunderaliabilitypolicy.atdidnotoccurhereuntilthethirdpartyplaintisamendedtheirpleadingtoincludeaclaimforcompensatorydamages.Moreovertheinsuredsclaimbasedontheinsurersallegedbadfaithinmanufacturingevidencefailsforthemostbasicreasonofall...aclaimforliabilitybasedonaninsurersallegedbreachoftheimpliedcovenantofgoodfaithandfairdealingcannotbemaintainedunlesstheinsuredwasentitledtocoverageundertheinsurerspolicy.Aninsurermustrovideadefenseeveniftheinsuredhasnotaidtheolicsself-insuredretentionabsentclearlanuaetothateffectnteoc.AmericanSafetyIndemnityCo.v.AdmiralInsuranceCo.2013220Cal.App.4th1.Oneinsurerwhopaiddefensecostssuedanotherinsurerforequitablesubroationbecausethedefendantinsurerdeclinedtodefendtheinsuredaainstunderlyinsoilsubsidenceclaimsnotinthattheinsuredhadnotyetpaidthe250000self-insuredretentionindefensecosts.etrialcourtruledthatthedefendantinsurerowedadutytoreimbursetheplaintifordefensecostsitpaid.eCourtofAppealFourthDist.Div.Onearmed.ThesubjectcommercialeneralliabilitypolicyhasaprovisionlabeledSelf-insuredRetentionSIRthatclearlymakestheinsuredliablefortherst250000indamaespayabletoanythirdpartyclaimant.epolicyalsomakesitcleartheinsuredspaymentofdefensecostscounttowardmeetintheinsuredsSIRobliations.HowevertheSIRclauseweareaskedtoconsiderdoesnotexpresslymakepaymentoftheSIRaconditionoftheinsurersbroaderobligationtoprovideadefensewhenanarguablycoveredclaimistendered.RathertheSIRclauseexpresslyappliesonlyasalimitationontheinsurersdutytoindemnifytheinsuredforcovereddamagesforwhichtheinsuredisfoundliable.GiventhelanguageofthepolicyaninsuredcouldquitereasonablyinterpretitasprovidingadefensetoarguablycoveredclaimsassoonassuchclaimsaretenderedandbeforeanySIRhasbeenpaid.edistinguishedprimaryinsurancepoliciesfromexcesspoliciesinwhichtheinsurergenerallyhasnodutytodefenduntiltheunderlyingprimarycoverageisexhausted.ontinuedromaeiii