What should you do when you get a ROR letter from your business insurance company?

We’ve talked before about what it means when you get a Reservation of Rights (ROR) letter from your business insurer, so you know that seeing one in your mail is not good. While not outright denying to cover a claim against you, your insurance company is questioning its obligations.

Now, what should you do about it? Here are some tips:

  • Read the entire letter. Don’t just skim it until you have the gist of the insurance company’s position and put it aside until you hear more. You need to fully understand what the insurance company is contesting and what assistance they are currently offering to defend you from claims.
  • Talk to an attorney. An experienced attorney can look at your policy, the insurance company’s letter and the facts in your case to develop a strategic response. That may include challenging unsupported assumptions or negotiating for a withdrawal of the reservations.
  • Respond to any questions. You may be required to give the insurance company more information about the situation that led to the claim against your business. If you don’t, you may be in violation of your policy.
  • Challenge the ROR. It may be possible to overcome the insurance company’s objections in court, especially if the ROR is vague or the insurance company isn’t acting in good faith.
  • Consider additional defense options. If the insurance company isn’t stepping up, you may also need to hire an independent attorney to defend your business interests right away.

Essentially, you don’t want to give the insurance company the upper hand in this situation by being passive. Asserting your rights and challenging the ROR letter is generally always better for you.

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