Reservation of Rights

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The Sixth Circuit has held under Michigan law that a reservation of rights letter including a right to reimbursement was sufficient to entitle an insurer to recoup defense costs paid when the insurer had no duty to defend even though the subject policy did not include language expressly providing for such right.  See Great American…

A split appellate court in Pennsylvania has held that an insurer is estopped from asserting a policy exclusion that it failed to expressly raise in its reservation of rights letter. See Selective Way Ins. Co. v. MAK Servs., No. 1289 EDA 2019, 2020 Pa. Super. LEXIS 342 (Pa. Super. Ct. April 24, 2020). The court’s ruling is an important reminder that failure to properly reserve the insurer’s right to deny coverage can sometimes have significant consequences.Continue Reading Pennsylvania Court Estops Insurer From Asserting Coverage Defense That Was Not Identified in Its Reservation of Rights Letter