Page 42 - Reservation of Rights - Special Edition

NEBRASKA
Notice/Content
A reservation of rights letter is a declaration by any insurer delivered to an insured stating, in effect, that the insurer reserves its rights to contest liability. Insurers generally use reservation of rights letters to preclude inferences that might otherwise be drawn by an insured from the conduct of the insurer. Keeton & Widiss, Reservation of Rights and Non- waiver Agreements, Insurance Law, § 6.7(a).
In Nebraska, a reservation of rights letter should be provided to the insured to allow the insured to protect its own inter- ests by retaining control over its own defense and to avoid conflicts of interest between the insurer and its insured.
First United Bank of Bellevue v. First Am. Title Ins. Co., 496 N.W.2d 474, 481 (Neb. 1993).
Content/Timeliness
The reservation of rights letter must be timely. Boren v. State Farm Mut. Auto Ins. Co., 406 N.W.2d 640, 643 (Neb. 1987). The letter should specify the reasons that the insurer
is disclaiming coverage. See, e.g., Radecki v. Mut. of Omaha Ins. Co., 583 N.W.2d 320, 324 (Neb. 1998). The letter should offer to defend the insured, but reserve all of its policy defenses. First United Bank of Bellevue, 496 N.W.2d at 481.
Conflicts of Interest and Independent Counsel
There is no authority concerning the right to independent counsel in Nebraska. There are several cases, however, that deal with whether an insured must accept a defense under
a reservation of rights. See, e.g., Hawkeye Cas. Co. v. Stoker, 48 N.W.2d 623 (Neb. 1951) An insurer does not have the right without consent of the insured to retain control of the defense of an action indemnifiable under the apparent terms of an insurance policy and at the same time reserve the right to disclaim liability on the policy. Id.
An insured may, after receiving a reservation of rights from its carrier, assume control of its defense. First United Bank
v. First Am. Title Ins. Co., 496 N.W.2d 474 (Neb. 1993). An insured does not have to allow the carrier to conduct the defense under a reservation of rights. Babcock & Wilcox Co. v. Parsons Corp., 430 F.2d 531, 537-38 (8th Cir. 1970).
2018 ReseRvation of Rights - special edition
NEBRASKA
Shively Law Group, P.C., L.L.O. in Lincoln, Nebraska specializes in civil defense litigation and alternative dispute resolution. We handle cases in Lancaster County and throughout Nebraska. The attorneys
at Shively Law Group, P.C., L.L.O. have more than 90 combined years of legal experience successfully litigating cases and delivering exceptional results to our clients. Our attorneys are skilled in the efficient delivery of high quality legal services through our comprehensive case evaluation, adept understanding of medical background and injuries, and knowledge of what appeals to a juror’s sensibility. Our firm’s AV rating is a testament to our ethical standards and legal abilities.
The attorneys at Shively Law Group recognize that our purpose as attorneys and counselors at law is to advocate for our clients and guide them through uncertain times. As attorneys, we use our analytical ability and extensive experience to direct our clients through each step of the legal process. As counselors, we focus on developing relationships of trust and support with each and every client to better understand their goals and objectives.
Practice Areas:
Insurance Defense; Insurance Coverage; Insurance Subrogation; Product Liability; Trucking and Transportation; Premises Liability; Professional Negligence; Commercial Litigation; Governmental Liability; Workers’ Compensation; Mediation.
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