Reservation of Rights Letters – Protecting Yourself

To: Our Valued Clients

Reservation of Rights Letters

Protecting Yourself

When Your Insurance Carrier Issues a Reservation of Rights Letter

This following article provides important information to contractors concerning a somewhat frequent carrier response to a General Liability claim –the Reservation of Rights letter.

Written by Attorney Michael P. Sams of Kenney & Sams, PC he prefaced the article by saying:

I’m attaching an article that is important to contractors concerning general liability coverage. Specifically, as you know, insurers can do one of three things when responding to a claim from their insureds; they can affirm coverage, deny coverage, or issue a reservation of rights wherein they provide a defense but reserve the right to disclaim coverage later.

It is the latter choice that often arises in construction cases where, legitimately, there are covered and uncovered claims.  In those instances, Massachusetts law provides that to properly protect the insured contractors where the insurer has a sort of ‘one foot in’ and ‘one foot out‘ of coverage position, the contractor should be able to retain its own counsel and have the insurer pay for that defense.

This remains a relatively unknown right for insured contractors but there are important practical and strategic reasons why the insured contractors should retain their own counsel to protect them in these instances.

Reservation of Rights Letter..

We hope you find the article interesting and helpful in protecting your rights.

Please let us know if you have any questions.


DeSanctis Insurance Agency, Inc.