Insurance for the Insurance Company - The Implications of a Conditional Defense under a Reservation of Rights

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When the coverage of an insurance policy is in doubt, the insurer may offer to defend the insured party under what is called a "reservation of rights." This means that while the insurance company is defending the client in the litigation or settlement proceedings, the defense is a "conditional defense," and the insurance company may later deny they are liable to cover the damages incurred. When this happens, the client who purchased insurance to protect themselves from personal liability, can be responsible for the full amount owed to the opposing party. Hankins v. State Farm Mut. Auto Ins. Co., 379 S.W.2d 829 (Mo.App.1964). A "reservation of rights" is enforceable in Missouri so long as there is 1) adequate and timely notice and the 2) insured does not advise the company that the conditional defense is unacceptable. Id.

If you have been in an accident and your insurance company informs you that it will defend you under a "reservation of rights" it is advisable to immediately consult with an independent lawyer. Consulting with an independent lawyer is necessary so that your rights under the disputed insurance contract can be fully protected. An attorney who represents you individually can assess whether or not the "reservation of rights" is justified and contest the conditional defense, if needed. With an attorney on your side, you can be sure that your insurance company will not be able to take advantage of you. Under Missouri law, a party whom accepts the "reservation of rights" instead of contesting it, is bound by the results obtained by the insurance company and could wind up being liable as an individual for the amount owed to the opposing party.

The dedicated personal injury attorneys of Meyerkord and Meyerkord, LLC, can be the skilled advocates you need to help you recover what you are rightfully owed under your insurance policy. Our attorneys have a track record of defending our clients in insurance disputes, even when the circumstances are difficult. Call toll free at 1-800-391-4318 to set up an appointment with our experienced advocates who will assess help you navigate the difficult situation which arises out of insurance coverage disputes.

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