Commentary and analysis on the
law of insurance coverage
When An Insurer’s Reservation of Rights Actually Reserves Nothing
As often as not, when a liability insurance company agrees to assume a policyholder’s defense against claims in a lawsuit, the carrier will issue a “reservation of rights” letter that says to the insured, in effect: “While we are protecting you for the time being, we might later decide that there’s no coverage under your policy for this lawsuit. And if we do reach such a conclusion: Sayonara.” Recently, the South Carolina Supreme Court held that, if carriers do not write those reservation of rights letters carefully and unambiguously, any later denial of coverage might be ineffective. Read More
