A reservation of rights defense is a means by which a liability insurance carrier agrees to protect and defend its insured against a claim or suit while reserving the right to further evaluate and perhaps even deny coverage for some or all of the claim. It is most commonly used when the claim or suit contains both covered and non-covered allegations, when the allegations are in excess of policy limits, or when the insurer is still investigating its defense and coverage obligations. For the insurer, a reservation of rights provides the flexibility to satisfy its duty to defend without committing to coverage. For the business owner who ultimately may have to pay for an adverse judgment, it requires careful monitoring and attention.
The New Hampshire Reservation of Rights Letter is an important legal document that serves to protect the rights of insurance companies and policyholders in the state of New Hampshire. This letter, also known as a Reservation of Rights (ROR) letter, is typically sent by an insurance company to an insured party when a claim is made against their policy. The purpose of the New Hampshire Reservation of Rights Letter is to provide notice to the insured party that the insurance company reserves the right to deny coverage or defend the insured under a reservation of rights. It outlines the specific reasons why the insurance company may choose to deny coverage, including policy exclusions or limitations, and informs the insured party of their rights and obligations under the insurance policy. The New Hampshire Reservation of Rights Letter is a crucial tool for insurance companies to establish their position in a claim and to affirmatively protect their interests. It facilitates open communication between the insurer and insured, ensuring transparency throughout the claims process. Within New Hampshire, there are different types of Reservation of Rights Letters that may be used depending on the circumstances of the claim. These include: 1. Coverage Reservation of Rights Letter: This type of letter is sent when the insurance company has concerns about whether the claim falls within the scope of coverage provided by the policy. It highlights specific policy language or exclusions that may impact the claim. 2. Defense Reservation of Rights Letter: When an insurance company agrees to defend their insured against a claim but has concerns about coverage, a Defense Reservation of Rights Letter is issued. It outlines the potential conflicts of interest and clearly defines that the defense does not constitute an admission of coverage. 3. Cumin Letter: In situations where a conflict of interest arises between the insurance company and the insured due to potential dual representation, a Cumin letter is sent. A Cumin letter ensures the insured's right to independent counsel, separate from the insurer's appointed defense counsel. The New Hampshire Reservation of Rights Letter is a critical component in insurance claim handling, allowing both insurance companies and policyholders to understand their rights and obligations. It serves to protect the interests of all parties involved and promotes the fair resolution of insurance claims within the state of New Hampshire.
