Understanding A Reservation of Rights Letter

Understanding A Reservation of Rights Letter

It sounds like something straight from your worst nightmare as a business owner. Someone sues your business for an error or omission. No problem, right? Your errors and omissions insurance will protect your company.  Then, you receive a  Reservation of Rights (ROR) letter.

What does this mean?  An ROR letter is simply your insurance provider’s way of letting you know that part or all of your claim may not be covered.  Your insurance carrier is required to send you the letter as soon as possible, and is likely only responding to the claims the plaintiff is making against you.

Furthermore, receiving this letter means that your insurance carrier is already making preparations for your defense. In fact, the letter should give you an idea of the steps they are taking towards defending the case.

If any of the verbiage in your ROR letter is confusing or if you do not agree with the letter it is important for you to contact your insurance provider or legal counsel for clarification right away and  to be sure that you get guidance that will help you to safeguard your company.

The hard work you put into your business merits an insurance agency that will work equally as hard for you. Do not be stuck with hard-to-understand communications and too many questions. Contact Hoffman Brown Company in Sherman Oaks for all of your California commercial insurance needs. We are here to make sure your business has the coverage it deserves. Do not wait; call us today!