Reservation of Rights

A reservation of rights is notice that an insurer will investigate or defend while preserving its right to deny coverage later.

Reservation of Rights is an important insurance concept because it can affect how coverage is selected, priced, interpreted, or applied at claim time. In practical terms, it helps explain what the policy may do, what the insured may be responsible for, or how the insurance company may evaluate a covered situation. This term is commonly associated with Liability, Professional Liability, Property. For business insurance customers, understanding Reservation of Rights can make it easier to compare policies, ask better questions, avoid coverage gaps, and understand what may happen before, during, or after a claim. The exact impact of Reservation of Rights depends on the policy form, endorsements, limits, deductibles, exclusions, state law, and the facts of the loss or account.

Example: Example: A business owner comparing quotes for liability coverage asks whether Reservation of Rights could affect contracts, claims, or required limits. The agent reviews the policy wording and explains how it may apply to the business operation.