In     Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP    the question of whether a law firm defending a client has an obligation to determine whether there is excess insurance available. 

This case, determined by the Second Department, has the following issue:

"The principal issue presented on this appeal concerns whether a law firm, retained by a primary carrier to defend its insured in a pending action, has any obligation to investigate whether the insured has excess coverage available and, if so, to file a timely notice of excess claim on the insured’s behalf. " 

"In any event, it seems self-evident that the question whether, in the ordinary case, an attorney could be found negligent for failing to investigate insurance coverage would turn primarily on the scope of the agreed representation – a question of fact – and on whether, in light of all relevant circumstances, the attorney "failed to exercise the reasonable skill and knowledge commonly possessed by a member of the legal profession" (Arnav Indus. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303-304; see Darby & Darby v VSI Intl., supra at 313; Levy v Greenberg, 19 AD3d 462). We cannot say, as a matter of law, that a legal malpractice action may never lie based upon a law firm’s failure to investigate its client’s insurance coverage or to notify its client’s carrier of a potential claim."

"Consequently, just as we are unprepared to say, as a matter of law, that a failure to investigate the existence of excess insurance coverage may never give rise to a legal malpractice action against an attorney retained directly by a defendant in a personal injury action, we take the same view with respect to an attorney who is retained, not by the defendant directly, but by its carrier. Accordingly, the defendant’s pre-discovery motion to dismiss the cause of action sounding in legal malpractice should have been denied. "

Here is the entire Case