Reservation of Rights

table name badge with the word reserved in red capital lettersWhat does reservations of rights mean?

A Reservation of Rights is a notification from an insurer that it has reserved its right to deny cover at a later date. It is normally applied when an insurance company is not sure whether or not a claim is covered under the policy.

A Reservation of Rights is not a notice that a claim is being declined, but is protecting the Insurer’s rights to do so. By putting in place a Reservation of Rights, an insurer is then able to liaise with an Insured and explore whether the claim is covered under the policy.

Reservations of Rights are quite common in the early stages of a claim being notified, but are often removed following discussion or further investigation.