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24 Journal of American Law // Spring 2015 documents for the wrap-up. In that case, there is a built-in exposure for the broker for the diference between the cov- erage as represented in the disclosures (or certifcate) and the actual coverage. In some wrap-ups, in addition to arranging the cover- age, the broker takes on the role of administrator to handle enrollment and also may supervise safety or loss control duties. Each of these roles, once assumed, must be handled with the requisite skill. Enrollment is a critical pressure point because it determines if the contractor is an insured. Who is responsible for enrollment: the broker or admin- istrator, the subcontractor, the general contractor, or the owner? To date, there are no reported decisions that dis- cuss liability if a party was not enrolled but should have been enrolled. Logically, if a contractor should have been enrolled, the measure of damages against the responsible party would be the amount that would otherwise have been covered by the wrap-up insurance. 8 For example, in a South Carolina case, the 4th U.S. Cir- cuit Court of Appeals found that the insurance broker was an "administrator" under the wrap-up program documents and was responsible for safety inspections. Te broker was held responsible and faced liability for damages that in- volved a workplace injury resulting from unsafe work con- ditions. 9 In a California case, the insurance broker, as part of implementing a wrap-up, developed a safety program for the project that identifed risks attendant with the project. Te broker undertook monitoring compliance with the safety program. Te court held that the broker could be held liable for negligently monitoring the program and allowing the in- jury producing condition to exist. 10 Tis case demonstrates the application of assumed duty by a broker as an adminis- trator. Te broker can be held liable to the owner and owes a duty of care for procuring and advising regarding insurance or the administration of the wrap-up program. Defense Lawyers Hired by Wrap-Up Liability Insurers Te roles of an insurance defense lawyer may create expo- sure in a typical situation for the insured (client) and the in- surer. In a wrap-up where the same insurer and policy covers all the participants, difculties may arise. 1. Multiple-Party Representation Te rules of professional responsibility apply even if there is one insurer for all the potential defendants and the claim is covered. If a lawyer represents multiple enrolled 8 Greenfeld v. Ins. Inc., 19 Cal. App. 3d 803, 812 (Cal. App. 5th Dist. 1971) discusses the measure of damages against an insurance agent that fails to obtain the agreed upon coverage, as the difer- ence between the coverage that should have been in place and the actual coverage. 9 Houston Cas. Co. v. St. Paul Fire & Marine Ins. Co., 456 Fed. Appx. 312 (4th Cir. S.C. 2011). 10 Velazquez v. Metro. Water Dist., 2002 Cal. App. Unpub. LEXIS 11706 (Cal. App. 4th Dist. Dec. 17, 2002). contractors and those parties have a confict of interest, the lawyer has a duty to advise the clients of the potential con- fict of interest and to obtain informed written consent from the parties to continue the representation. 11 Insurers must be attuned to this issue and respect the ethical boundaries of the lawyers they hire. If policy limits are sufcient, a confict of interest may be waivable by the parties and a single lawyer is all that would be required. Tis might even be called the "golden rule" of insurance defense litigation: the insurer has the gold and can usually make the rules as long as it is willing to pay for the result. However, when the potential conficts between the clients cannot be easily resolved, and even when it appears that there ultimately will be no confict, the pru- dent defense lawyer will obtain informed written consent for the multiparty representation. 2. Inadequate Limits While the value of the claim does not entitle an insured to independent counsel paid for by the insurer, at least in California, 12 the confict of interest exists between multi- ple clients of the same lawyer who have rights of indemnity against one another once the insurance policy is exhausted. So long as a client faces any uninsured exposure, the lawyer should not represent multiple contractors with rights against one another absent a written confict waiver before proceed- ing to represent any of them. 13 3. Te Insurer's Reservation of Rights Insurers may defend a lawsuit under a reservation of rights in case the facts in the lawsuit ultimately prove that the insured's liability is not covered by the policy. Te insurer has broad latitude to decide what rights it is reserving and may decide whether to defend under a reservation of rights or decline to assert any coverage limitations. A reservation of rights identifes (and arguably creates) an uninsured ex- posure for each contractor even if, taking all the enrolled contractors together, the loss ultimately is covered by the wrap-up program. Tat the insurer ultimately may have to pay does not eliminate the lawyer's obligation to defend his client. Most insurers would expect their counsel to advise them of a confict that will afect their representation. 14 Un- less the insurer is willing to accept coverage for the ultimate result where a single lawyer is retained, however, the defense attorney unwittingly could take an adverse position to the 11 See Cal. Rules of Prof 'l Conduct 3-310. See also Model Rules of Prof'l Conduct R. 1.7 (2013). 12 Cal. Civ. Code ยง2860(b). 13 Cf. Model Rules of Prof'l Conduct R. 1.7 (2013), though some states may have specifc rules relating to when written con- fict waivers are required. 14 Te author is aware of at least one insurer currently insisting on the return of any paid fees if there is a confict that should have been disclosed at the onset of the case as part of the litigation guidelines.