By Susan White ( August 29, 2018, 4:27 PM EDT) -- When a liability insurer agrees to defend its insured after the insured has been sued, this is often cause for celebration, as the insured believes its defense will be paid. The insurer may reserve its rights to deny coverage, and advise that such reservation creates a "conflict of interest" entitling the insured to "independent" counsel. Thus, instead of the insurer selecting the insured's defense counsel, which is common under a duty to defend policy, the insured gets to choose its own counsel. Still reason to celebrate, right? But, as you may suspect, this selection right comes with a catch. The insurer advises that while the insured can choose its own counsel, the insurer only agrees to pay a very low hourly rate, maybe $225 or $250 per hour (it varies, sometimes dramatically so), which is much less than what is being charged by the insured's independent counsel. If the litigation against the insured is significant, the delta between the rate the insurer agrees to pay and counsel's actual rate can add up to millions of dollars....