Reservation of Rights for Casualty Adjusters

1) Overview
a) What is an ROR Letter
b) How to draft an ROR Letter
c) Ramifications of failing to provide an ROR letter
d) Ramifications of a deficient ROR Letter
e) Other important concepts
2) What is a Reservation of Rights
a) Definition
b) When is a ROR used
i) combination of covered and non-covered claims
ii) law is unsettled regarding duty to defend
(1) Example:
(2) ADA claims
iii) Policy defense may exist
(1) no coverage
(2) excluded
(3) policy conditions not met
3) Rights Gained from ROR
a) Ability to refuse to indemnify for judgment or settlement
b) Ability to withdraw from a defense
c) Ability to seek reimbursement
i) Defense costs
(1) some states only
(2) apportionment issues
ii) Settlement amounts
(1) some jurisdictions
(2) burden of insurer to prove no coverage
(3) giving option of assuming own defense
iii) Judgments
4) ROR distinguished from a non-waiver agreement
a) ROR = unilateral agreement
b) Non-waiver = bilateral agreement (in some jurisdictions)
c) California non-waiver agreements
i) come at beginning of tender
ii) are unilateral
iii) used during investigation prior to accepting tender
5) Importance concepts in Drafting an ROR Letter
a) Specificity
i) be fair
ii) be comprehensive
iii) exception: fraud – see immunity statutes
b) Understandability
i) good flow
ii) straight forward
iii) minimal errors
c) Timeliness
6) Recap
7) Quiz – Reinforcing Part 1 Materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Identify the Policy
a) Correct Policy Number
b) All Policy Numbers Included
i) multiple policies
ii) quote from all policies
iii) don’t assume policies have same language
c) List Policy Period
d) List Claim Information
2) State the Purpose of the Letter
a) Defending but Reserving Rights
b) State this in first paragraph
c) Be clear
d) No denial language
e) O.K. to also put at top of letter
3) Summarize Pleadings and Facts
a) Clearly inform
b) Follow state law
c) Avoid waiver
d) Use “allegedly”
4) Include Policy Language
a) Quote policy language
b) Explain relevance of language
c) Potentially troublesome techniques
i) attaching whole policy
ii) large cut and paste
iii) vague references to policy
5) Identify Coverage and Policy Defenses
a) Explain the bases of defenses
b) Explain what may happen
i) no payment of defense
ii) no payment of judgment
6) Dangers of Form Letters
a) Failure to Adequately Modify
b) Can be used effectively
7) Recap
8) Quiz – Reinforcing Part 2 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Identifying Rights Reserved
a) Right to withdraw from the defense
b) Reimbursement
i) defense/settlement costs
ii) indemnity/settlement amounts
iii) must be non-covered matters
2) Ambiguities Avoided
a) Avoid declining coverage
b) Avoid conflicting letters
c) include important facts
3) Continued cooperation
a) duty
i) express
ii) implied
b) Forward additional pleadings
c) Example
4) Insured’s Right to Their Own Counsel
a) At their own expense
b) Assists insured with coverage issues
c) distinguished from Right to Independent Counsel
d) Example of estoppel
5) Insurer’s Right to File for Declaratory Judgment
a) Reduce potential for surprise
b) May help with negotiations on coverage
6) Quiz – Reinforcing Part 3 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Catch All Sentence
a) Purpose
b) Application
2) Right to Independent Counsel
a) Notice Required in some states
i) e.g. California
ii) statutory
iii) case law
b) Application
c) relation to conflicts of interest
3) What not to include
a) extraneous information
b) confusing statements/contradictions
c) advise NOT to retain counsel
d) denial of coverage
4) Sending the letter
a) certified mail
b) who to send it to
c) who to copy
5) Authoring the letter
a) who should sign
b) what if counsel signs
c) which adjuster
6) Recap
7) Quiz – Reinforcing Part 4 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Definitions
a) Waiver
b) Estoppel
c) “no coverage by estoppel”
d) proof of prejudice
2) Time Element Factors
a) Length of time before tender
b) Time between tender and ROR
c) Time defended without v. with ROR
d) Stage of Litigation
3) Other Factors
a) Insurer’s Diligence
b) Insured’s personal counsel
c) Insured’s control
d) complexity of issues
e) lawsuit or merely a claim
4) Recap
5) Quiz – Reinforcing Part 5 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Conflicts of Interest
a) What causes the conflict
b) Does an ROR automatically create a conflict
c) Examples
d) Requirement for independent counsel
2) Declaratory Judgment Actions
a) Acting as ROR
b) Mandatory Dec Actions
c) Justiciability
d) Limitations on evidence
3) Insured’s Rejection of ROR
a) acceptance by silence
b) Offer Unqualified Defense
c) Continue to Defend
d) Withdraw from Defense
e) Offer Independent Counsel
4) Final thoughts
5) Recap
6) Quiz – Reinforcing Part 5 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz