Page 7 - Reservation of Rights - Special Edition

ALABAMA
Notice
An insurer that intends to defend an insured pursuant to a reservation of rights must (1) “provide notice to its insured of that fact” and (2) “keep its insured informed of the status of the case.” Shelby Steel Fabricators, Inc. v. U.S. Fid. & Guar. Ins. Co., 569 So. 2d 309, 313 (Ala. 1990).
In Shelby Steel Fabricators, the court held that where a non- waiver form was mailed to the insured, the insured received at least “constructive notice” that the insurer was defending the claim against it pursuant to a reservation of rights. A let- ter was also mailed to the insured’s attorney, which indicated that because of extensive investigation involved, it would
be necessary for the insurer to handle the matter under
a non-waiver agreement. The fact that the insured never signed the non-waiver form, nor mailed it back to insurer, was deemed immaterial by the court for purposes of notice. Nevertheless, the court found that by failing to keep the
insured informed of the status of the case, as required under the second prong of notice, the insurer failed to satisfy its enhanced obligation of good faith (discussed below) and could not later deny coverage pursuant to a reservation of rights. 569 So. 2d 309.
Grounds/Defenses
A disclaimer of coverage should describe all grounds for de- nial and defenses to coverage; any ground or defenses not included are deemed waived. First Ala. Bank of Montgomery, N.A. v. First State Ins. Co., 899 F.2d 1045, 1063 (Ala. 1990). However, “coverage under an insurance policy cannot be created or enlarged by waiver or estoppel.” Home Indem. Co. v. Reed Equip. Co., 381 So. 2d 45, 50-51 (Ala. 1980).
Waiver/Estoppel
The insurer must make its position clear to the insured or else it might be held to have waived its right to with- draw. Tapscott v. Allstate Ins. Co., 526 So. 2d 570 (Ala.
2018 ReseRvation of Rights - special edition
ALABAMA
Miller, Christie & Kinney, P.C., holds the “AV” rating from Martindale-Hubbell and is engaged in a diverse litigation practice on behalf of a wide ranging client base that extends to all courts and areas of civil practice. Our attorneys practice in every facet of insurance law including coverage analysis, property, casualty, medical malpractice, products liability, and worker’s compensation. The firm is also engaged in the practice of business, corporate, and municipal liability law.
In each area of practice, the firm is committed to zealous advocacy of the clients’ best interests without compromising personal attention and effective representation. Members of the firm have taken leadership roles in key local and national legal organizations. Additionally, the attorneys are involved in numerous social and civic activities and devote considerable time to bettering the public perception of the profession through speaking and teaching engagements.
Miller, Christie & Kinney, P.C. brings together a wide range of professional experience and expertise and has earned its reputation as an aggressive minded, defense oriented, litigation firm. The firm’s philosophy and emphasis remains a commitment to excellence, grounded in a superior work ethic and a dedication to meeting the needs of our clients.
Practice Areas: Defense of Civil Litigation involving Insurers and Insureds; Premises Liability; Products Liability; Personal Injury; Automotive Liability; Workman’s Compensation; Professional Malpractice; Municipal Liability.
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