Page 40 - Reservation of Rights - Special Edition

MISSOURI
Notice
An insurer must provide “notice to an insured that its defense of an action should not be construed as a waiver
of any policy defense and the insured accepts the defense
of the action without protest and with full knowledge of
the position of the insurance company of its right to assert non-liability.” Such a reservation puts the insured on notice that there may be a conflict between the insured’s interest and those of the insurance company, along with the fact that the insured may be exposed to personal liability not covered by insurance. Atlanta Cas. Co. v. Stephens, 825 S.W.2d 330, 333 (Mo. Ct. App. 1992); Brooner & Assoc. Constr. Co. v. W. Cas. & Sur. Co., 760 S.W.2d 445, 447 (Mo. Ct. App. 1988).
Content
An insurer owes the insured a duty to assert a proper reservation that is timely, clear, and that fully informs the
insured of its position. Advantage Bldgs. & Exteriors, Inc. v. Mid-Continent Cas. Co., 449 S.W.3d 16, 23 (Mo. App. W.D. 2014). A liability insurer who assumes a defense subject to a reservation of rights must advise the insured of any grounds on which it appears that all or part of that asserted liability may not be covered, and the letter should be “specific and unambiguous,” should “fully explain the insurer’s position ... with respect to the coverage issue,” and “must avoid
any confusion.” Id. Additionally, as stated above, the letter must explain that the defense of the action “should not be construed as a waiver of any policy defense,” Id. (quoting Kinnaman-Carson v. Westport Ins. Corp., 283 S.W.3d 761, 765 (Mo. banc 2009)), and that “the insured accepts the defense with full knowledge of the position of the insur- ance company.” Id. As such, the reservation of rights letter should specifically identify the relevant portion of the policy that may lead to non-coverage. Failure to provide a proper and effective reservation of rights letter before defending an action with knowledge of non-coverage may be treated as if the reservation had never been made at all, thereby preclud-
2018 ReseRvation of Rights - special edition
MISSOURI
Rynearson, Suess, Schnurbusch & Champion is a litigation firm that defends clients in complex litigation. The firm’s partners represent over one hundred years of litigation experience. RSS&C can handle the most complex litigation and at the same time give our client’s smaller matters the attention they need to be handled properly. But experienced does not mean behind the times. The firm is formed with a commitment to the future and being the most technologically advanced, efficient law firm it can be.
Rynearson, Suess, Schnurbusch & Champion is am AV rated civil liability firm defending personal injury, products liability, premises liability, workers’ compensation matter, and contractual and other disputes. We were honored recently as one of the most “winningest” defense firms in Missouri. We practice primarily in Missouri and Illinois before state, federal and appellate.
Practice Areas: Transportation Law; Premises Liability; Products Liability; Workers’ Compensation; Insurance Coverage Law; Employment Law; Research and Appellate Practice; Guaranty Association Law; Subrogation; Corporate; Family and Domestic Relations; Estate Planning and Probate; Commercial Litigation; Real Estate Litigation; Workers’ Compensation; Retail and Restaurant Defense; Unemployment and Social Security Appeals.
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