What Is Moeller Counsel, and Why Does It Matter to You?
Imagine being sued and relying on your insurance company to defend you—only to find out later they might refuse to pay the claim altogether. It’s a stressful and potentially damaging situation. Thankfully, Mississippi law provides protection for insured individuals facing this dilemma through something known as "Moeller counsel."
What Exactly Is Moeller Counsel?
In Mississippi, Moeller counsel refers to your right to choose an independent attorney when your insurance company agrees to defend you under a "reservation of rights." A reservation of rights means your insurance company provides legal representation but also explicitly states they may deny coverage for the claim later.
The term "Moeller counsel" comes from a landmark Mississippi Supreme Court case, Moeller v. American Guarantee & Liability Insurance Co. This ruling established the important principle that when an insurance company defends a policyholder under a reservation of rights, the insured has the right to select their own independent counsel, with the insurer responsible for the attorney’s fees.
Why Would You Need Moeller Counsel?
Insurance companies have a financial interest in minimizing or even avoiding payouts. When they issue a reservation of rights, they're essentially signaling that they might not fully stand behind you when the lawsuit concludes. This creates a conflict of interest:
- Whose interests will the insurer’s attorney prioritize?
- Will they focus on limiting the insurer’s financial exposure or on fully protecting your rights?
Moeller counsel ensures your lawyer has no divided loyalty—their only priority is you.
Real-World Example of Moeller Counsel
Consider this scenario:
Sarah owns a small retail store. A customer slips, falls, and files a lawsuit alleging negligence. Sarah's insurance company agrees to provide a defense but issues a reservation of rights, claiming that certain policy exclusions might apply. Sarah is now facing uncertainty about whether the insurer will ultimately cover any judgment.
Because of Moeller, Sarah has the right to hire her own attorney—someone whose sole responsibility is to ensure Sarah’s interests are fully protected throughout the litigation. The insurance company is required by law to pay the reasonable attorney’s fees incurred by Sarah’s chosen counsel.
Your Rights Under Mississippi Law
Under Mississippi law, if your insurer defends your lawsuit with a reservation of rights, you have the following rights:
- Right to Independent Counsel: You may select an attorney you trust, independent of your insurance company.
- Insurer-Paid Legal Fees: Your insurer must cover the reasonable legal fees for your chosen Moeller counsel.
- Peace of Mind: You know your attorney’s loyalty is solely with you—not with the insurer.
How The Stutzman Law Firm Can Help
At The Stutzman Law Firm, we understand how stressful it can be when facing litigation combined with insurance uncertainty. We're committed to educating and empowering our clients to understand and assert their rights fully. If you're facing a reservation of rights situation, we're here to help you evaluate your options and ensure you receive the dedicated advocacy you deserve.
Don't face insurance disputes alone— call us today at (769) 208-5683 for a free consultation.
