Legal Question in Insurance Law in California

Your question is too vague to answer. Please repost your question with more specifics.

I assume you are referring to a liability policy under which you are being defended.

In this situation, both insureds split the policy limits when it comes time to pay damages.

As to the defense, your lawyer should tell you that when a lawyer represents more than one client, that if there is an actual conflict, the lawyer must withdraw. If there is a potential for conflict, as there often can be, the lawyer must have both party's consent. However, under the policy there is a "Supplementary Payments" clause which insurers argue is the consent to represent two insureds. If that is a problem, then there are some arguments about the Supplementary Payments clause not providing consent to represent potentially conflicting interests.