When an individual or business with a liability insurance policy is sued, the individual or business (the insured) will generally tender the lawsuit to its insurance company (the insurer) by providing a copy of the lawsuit and asking the insurer to defend the insured.

It is not uncommon in this situation for the insurer to take control of the defense of the lawsuit, but to send a reservation of rights (ROR) letter to the insured explaining why the insurer may ultimately deny coverage for the claims asserted in the lawsuit—based on one or more exclusions from coverage in the insurance policy, for example.

Having reserved its right to deny coverage, the insurer may, at any time, deny the claim for insurance coverage and discontinue paying the lawyer to defend the lawsuit—leaving the insured to hire a lawyer at its own expense to defend the lawsuit.

Insurance coverage and claims issues—including ROR letters and the related issue of the insured’s right to independent counsel—are often complex and an insured is usually well-served by promptly discussing these matters with an experienced insurance coverage lawyer.

In Connecticut, when an individual or business is sued and has liability insurance, they typically notify their insurer and request defense under their policy. The insurer may agree to defend the lawsuit but often issues a Reservation of Rights (ROR) letter. This letter informs the insured that the insurer may not cover certain claims due to policy exclusions and could ultimately deny coverage. If the insurer decides to deny coverage, they will stop funding the defense, and the insured will then need to pay for their own attorney. The issues surrounding ROR letters and the right to independent counsel can be intricate. It is advisable for the insured to consult with an attorney who specializes in insurance coverage to understand their rights and options under Connecticut law.