reservation of rights

A reservation of rights is a provisional denial of coverage. A reservation of rights serves as a warning by an insurer that it may deny coverage to its policyholder on any and all grounds. By reserving its rights to deny coverage, the insurer does not waive any rights it might have against its policyholder and avoids a legal estoppel, waiver or forfeiture. As applied to liability insurance, insurers often reserve the right to contest the duty to indemnify and/or the duty to defend, while agreeing to defend. See, Article: Reservation of Rights.

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