Page 47 - Reservation of Rights - Special Edition

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Notice
The reservation of rights letter must give fair notice that
the insurer intends to assert coverage defenses or to pur- sue declaratory relief at a later date. United Nat’l Ins. Co. v. Waterfront N.Y. Realty Corp., 948 F.Supp. 263, 268 (S.D.N.Y. 1996).
The reservation of rights can take the form of either a uni- lateral notice from the insurer to the insured or non-waiver agreement signed by both the insurer and the insured. Both are of equal effect. To be valid, both forms of reservation must be prompt and specific. The insurer issuing a reserva- tion of rights should take as much care in the timeliness of the notice and the specificity of the grounds as it would in issuing a denial or disclaimer of coverage.
Content
The letter should state the possible defenses to coverage, ref- erencing the specific policy provisions that form the basis for
the insurer’s reservation. United Nat’l Ins. Co. v. Waterfront N.Y. Realty Corp., 948 F.Supp. 263, 268 (S.D.N.Y. 1996).
If further investigation of a claim is warranted, the insurer should notify the insured that the insurer reserves the right to disclaim coverage based upon further factual develop- ment. Merchs. Mut. Ins. Co. v. Allcity Ins. Co., 664 N.Y.S.2d 690 (App. Div. 3d 1997).
Timeliness
When the insurer’s disclaimer of liability under the policy was first made two years before the trial and again five months before the trial and the insured was given a full opportunity to join in the defense of the action, the court could not find as a matter of law that the insurer should be estopped from denying coverage of the policy in the absence of a show-ing that the delay in notification prejudiced the rights of the insured. O’Dowd v. Am. Sur. Co. of N.Y., 144 N.E.2d 359 (N.Y. 1957).
In Village of Waterford, the court held that a reservation of rights letter sent three months after notice of lawsuit given
2018 ReseRvation of Rights - special edition
NEW YORK–Rochester
Connors, Corcoran & Buholtz, PLLC is a multi-faceted law firm with a state-wide practice counseling our clients in business and personal matters and representing them in civil trial work and insurance law. We are highly skilled in helping our clients to achieve their goals as well as representing them aggressively in litigation when a law suit is warranted or has been commenced.
We counsel our individual and business clients in the formation and ongoing existence of small business; in buying, selling, leasing residential and commercial real estate; in estates and trusts planning and administration; and in all types of civil litigation including personal injury, breach of contract, and insurance claims.
Having stood the test of time since 1928, we have worked with major insurance companies representing their policy holders in law suits on many issues. Given that experience and background, we understand the ins and outs of the insurance industry as well as how to prosecute and defend all types of civil law suits.
Connors, Corcoran & Buholtz, PLLC is a 100%-woman-owned business that tries cases, argues appeals, and mediates settlements. We close cases for amounts that are less their reserves in the shortest time possible. We lecture on substantive law and civil procedure. We serve on judicial evaluation committees for local and regional trial judges and for regional and statewide appellate judges. Our staff includes a mechanical engineer and a registered nurse.
Practice Areas: Professional Malpractice; Products Liability; Premises Liability; Insurance Coverage; Automobile Negligence; Construction Site Accidents; Employment Discrimination.
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