Claims
Reservation of Rights
A written notice from an insurance carrier to its insured stating that the carrier will defend or investigate a claim but reserves its right to later deny coverage if the facts establish that the claim falls outside the policy's terms. A reservation of rights letter does not terminate coverage but puts the insured on notice that coverage may ultimately be disputed. Insureds who receive such a letter should consider retaining independent counsel to protect their interests.
Related terms
Duty to DefendThe insurer's obligation to provide and fund a legal defense when a covered claim is made against th...Notice of CircumstancesA formal notification provided by the insured to the insurance carrier advising of facts or circumst...Denial of CoverageA formal determination by an insurance carrier that a reported claim does not fall within the scope ...Duty to DefendThe insurance carrier's contractual obligation to provide and pay for a legal defense when a covered...