Reservation Of Rights — Insurance Claims Definition
A letter from an insurer stating it is investigating or defending a claim without waiving the right to later deny coverage.
A reservation of rights (ROR) preserves the insurer's coverage defenses while the claim proceeds. It puts the insured on notice that some facts or policy provisions may result in denial or partial denial later. In liability claims, defense under ROR is common while coverage is investigated.
Insureds may seek independent counsel (Cumis counsel in some jurisdictions) when a conflict exists between insurer and insured over coverage.
Examples
The liability insurer appoints defense counsel but sends an ROR because the complaint alleges intentional acts potentially excluded by the policy.
Common Mistakes
Ignoring an ROR letter misses deadlines to protect rights. Assuming an insurer defending has conceded full coverage is incorrect until a firm coverage position is taken.
