Reservation of Rights

News & Analysis as of

Is that Covered? Reservation of Rights Letter

If your client is sued, one immediate task is to determine if there is insurance coverage for the claim(s). If you submit the claim to an insurance company, Pennsylvania law requires that it acknowledge receipt of the claim...more

Insurance Recovery Law - September 2014 #2

D&Os Entitled to Unfettered Access to Bankrupt Company’s Policy Proceeds to Fund Defense Costs: Why it matters - In an important victory for directors and officers of a bankrupt company, a New York court...more

Calling a Letter a “Reservation of Rights” Does Not Necessarily Make It So

Many insurers are in the habit of sending perfunctory “reservation of rights” letters to their insureds throughout the lifetime of a claim. The reason they do so is not a very well-guarded secret in the insurance industry. An...more

Insurer’s “Reservation of Rights” Creates a Conflict of Interest, Entitling the Insured to Independent Defense Counsel

In case that has been widely watched by Minnesota insureds and insurers alike, a federal district court ruled Tuesday that an insurer’s “reservation of rights” letter created a conflict of interest, thereby permitting the...more

Eleventh Circuit Dials Back The Specificity Required In An Insurer’s Reservation of Rights—Will Georgia Courts Agree?

The U.S. Court of Appeals for the Eleventh Circuit recently held under Georgia law that an insurance company does not waive a coverage defense by defending the policyholder in an underlying case without reserving its rights...more

"Non-Trivial Probability" of Excess Judgment Obligates Insurer to Pay for Independent Defense Counsel

The court in Perma-Pipe, Inc. v. Liberty Surplus Insurance Corporation, Case No. 13 C 2989, 2014 U.S. Dist. LEXIS 54867 (N.D. Ill. April 21, 2014), held that a CGL insurer breached its duty to defend by refusing to pay for...more

Insurance Recovery Law - May 2014

Policyholder Entitled to Select Counsel, Even Where Insurer Withdrew Reservation of Rights - Why it matters: An insured dissatisfied with counsel selected by its insurer was entitled to select counsel of its...more

Debate Over the ALI’s “Principles of the Law of Liability Insurance” Continues – Advisers Slated to Discuss Contentious Portions

At its 2013 annual meeting, the American Law Institute (ALI) voted to adopt sections 1 through 15 of its “Principles of the Law of Liability Insurance.” However, extensive criticism during the floor debate prevented the ALI...more

Policy Observer - December 2013

Time for a Change? California Revisits Henkel on Coverage for Contractually Acquired Liabilities - The California Supreme Court’s unexpected decision earlier this year to accept review of Fluor Corp. v. Superior Court,...more

Insurance Recovery Law -- Dec 11, 2013

FEMA Clarifies Time Extension for Victims of Sandy - Why it matters: Given the unprecedented meteorological event known colloquially as “Superstorm Sandy,” the Federal Emergency Management Agency granted multiple...more

Everyone Can Find Reasons to Give Thanks for 2013 California Coverage Opinions

Thanksgiving is one day when the whole family gets together and sets aside petty differences to give thanks to the Almighty for the bounty we enjoy. California’s insurance coverage family is often a dysfunctional one. To...more

Insurance Recovery Law -- Oct 29, 2013

California Insurance Dreamin’ - Why it matters: The Swanson decision establishes a clear boundary line for an insurer’s Cumis obligations. Just because a conflict existed at one point in the litigation and the insurer...more

California: Right to Independent Counsel Evaporates After Insurer Withdraws Reservation of Rights

A California appellate court recently held that insurers are not obligated to provide an insured with independent counsel after the insurer withdraws the reservation of rights which generated the right to independent counsel....more

A Reservation of Rights Regarding the Pollution Exclusion and the Timing of Damages Does Not Trigger An Insured’s Right to...

In Federal Ins. Co. v. MBL, Inc., 2013 WL 4506149 (Cal. Ct. App. Aug. 26, 2013), the California Court of Appeal continued the judicial trend of restricting the insured’s right to insurer-paid independent counsel. The court...more

Who Needs “Reservations”? Court Rules On Employer’s Ability To Reduce Retiree Benefits

In an era where finding efficiencies and cost-cutting are often important tools for business, a question faced by business is how and whether benefits in place for current employees and retirees can be changed....more

Supreme Court of Washington Holds that Insurers Are Not Entitled to Reimbursement of Non-Covered Defense Costs

In a 5-4 decision, the Washington Supreme Court held that an insurer may not recover defense costs incurred under a reservation of rights while the insurer’s duty to defend is undetermined. National Sur. Corp. v. Immunex...more

Is That Covered? Cumis Counsel (March, 2013)

Let's say that you or your client is sued for breach of contract and negligence. You send the suit papers to the general liability insurer and it agrees to defend the claim, but under a "reservation of rights." The basis of...more

Insurers Lose Defense Reimbursement Battle in Washington State

It’s cynically said that no good deed goes unpunished. The Washington State Supreme Court seems to agree when it comes to insurers’ reservations of rights to seek reimbursement of fees and costs they have paid for the defense...more

Washington Supreme Court: Insurers May Not Reserve the Right to Seek Reimbursement of Non-covered Defense Costs

The Washington Supreme Court joined a minority of jurisdictions that hold that insurers may not unilaterally reserve the right to seek reimbursement for defense costs paid in defending non-covered claims through a reservation...more

Insuring Your Business -- March 2013

In This Issue: - Insurance Coverage Update: Reservation of Rights Letters - Insurance Spotlight: Cyber Risks. ...more

California Court Holds That A Tripartite Attorney-Client Relationship Exists Between A Title Insurer, Its Insured And Counsel...

Ten years ago, a California Court of Appeal took a relatively narrow view of the attorney-client privilege in conjunction with claims investigation and analysis conducted by a title insurer’s in-house counsel....more

Fifth Circuit Rejects Insured’s Efforts to Secure Independent Counsel

On October 15, 2012, the U.S. District Court of Appeals for the 5th Circuit – applying Texas law – addressed another Cumis counsel matter. See Coats, Rose, Yale, Ryman & Lee, P.C. v. Navigators Specialty Ins. Co., No....more

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