In response to an insurance claim you may receive a Reservation of Rights Letter from your insurance company stating it believes that there is no insurance coverage or duty to defend you for the claim, but that it will continue to defend you during the time if its investigation. Such letters put you on notice that you may not have insurance coverage for the loss, and should spur you to take certain action to protect yourself and your business.
Some steps to take on receiving a Reservation of Rights Letter include:
- Review the letter and your referenced policy to understand the basis, if any, of the carrier’s reservation of rights.
- Determine other insurance protection you may have available through other policies, insurers or third parties, and perfect notice of the claim to those carriers.
- Talk to your agent, broker or other persons who provided, obtained or assisted you in obtaining the insurance coverage to determine whether proper coverage was obtained and enlist their help.
- Contact the underwriter for the policy, not just the claims department, to determine the basis of the reservation, and what actions will be taken in the interim.
- Analyze your relationship with that carrier for other insurance or business relationships that could be advantageous to resolving the situation in your favor.
- Cooperate with counsel appointed by the insurance carrier to defend the claim during the reservation of rights period, but do not discuss coverage issues.
- Retain an insurance coverage lawyer to review the situation and the results of your investigation, and to advise you as to steps you can take to protect you and your business.
- Negotiate the best situation you can to ensure protection and coverage for you and your business.
- Initiate proceedings to obtain a declaration of coverage and entitlement to a defense.
- Retain separate counsel to oversee the defense being provided during the carrier’s investigation.
The attorneys at Brooks, Tarulis & Tibble, LLC have experience in reviewing insurance policies and addressing issues created by Reservation of Rights Letters, denial of coverage or limited defense letters. If we can assist you in this regard, please contact us.
Douglas C Tibble