Reservations of Rights
It is common for insurance companies to "reserve their right" to deny coverage until the facts of a tendered claim become fully developed. The law generally, and particularly in California, has increasingly allowed policyholders to assume their own defense in such situations while requiring the insurer to pay for that defense, on the theory that if the insurer controls the defense, it can steer that defense into channels where there is no coverage. The policyholder's right to control its own defense in such circumstances is commonly known as the "Cumis" right, after one of the leading cases on the subject.
Nossaman lawyers can guide policyholders through the complex situations which arise in these highly contested coverage areas.