Contested Insurance Coverage: Defense Under Reservation of Rights

Strategies to Reconcile Policyholders’ and Insurers’ Competing Interests

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, April 2, 2009

Course Materials

This seminar will examine the legal issues that arise for the insurer and the policyholder when the insurer's duty to defend is under dispute. The panel will discuss different state law and court approaches and ways that the insurer and the policyholder can work toward a resolution of the conflicts presented.


Under most liability insurance policies, insurers have the duty to defend the policyholders from lawsuits seeking damages within the scope of coverage. However, situations often arise where the insurer and insured disagree on the extent and applicability of coverage under the policy.

The insurer can proceed to defend the insured under a reservation of rights — or it may refuse and file a declaratory action for a court to determine coverage. What are the policyholder's options under these circumstances?

State law and court decisions are crucial in determining the insurance company's and the policyholder's rights when the duty to defend is under dispute. Both parties must understand the standards for relevant jurisdictions.

Listen as our panel of experienced insurance attorneys examines the competing interests of the insurer and the policyholder where the duty to defend is under dispute, how different state laws and courts treat the issue, and how both the insurer and the policyholder can work toward a resolution.



  1. Insurer’s duty to defend when legitimate defenses exist
    1. Defend under reservation of rights
    2. File declaratory judgment against policy
    3. Refusal to defend
    4. Additional considerations
  2. Importance of applicable law
    1. State laws
    2. Role of extrinsic evidence
  3. Policyholders’ response
    1. Challenging declaratory judgment action
    2. Bad faith claim


The panel will review these and other key questions:

  • What are an insurer's key considerations in deciding whether to file a declaratory action to dispute coverage?
  • What are the prevailing state law standards governing the insurer's duty to defend — and when an insurer can file a declaratory action?
  • What are the best practices for both sides to reconcile their competing interests when they don't agree about extent of coverage?
  • What ethical issues arise when an insurer representing a policyholder hires counsel in a liability matter?


John E. Heintz
John E. Heintz

Kelley Drye & Warren

He chairs the firm's Insurance Recovery Practice and has nearly 30 years of experience in corporate insurance coverage...  |  Read More

Kenneth E. Ryan
Kenneth E. Ryan

Wiley Rein

He represents insurers in coverage matters, litigates insurance coverage and other commercial litigation cases, and...  |  Read More

Robert M. Fineman
Robert M. Fineman

Duane Morris

He practices in the areas of commercial and insurance coverage litigation with an emphasis on complex litigation...  |  Read More

Jerold Oshinsky
Jerold Oshinsky

Gilbert & Oshinsky

He focuses on insurance coverage litigation on behalf of policyholders in federal and state courts and on counseling...  |  Read More

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