Insurance claims often do not start as well as you hoped. That does not mean they will not end well, but it does mean you will need to go to lengths you might not have planned for to ensure they do.
It is often urgent when you file a claim on your business insurance. Yet, insurers may not treat it that way. Despite your obvious distress and need for money to put things right so you can carry on with business, they come up with ways to delay things. One is to send you a reservation of rights letter.
When an insurer sends you a reservation of rights letter, what they are doing is covering their back. They are not saying they won’t pay out. They are advising that they might not.
It’s a sign you need to prepare for a fight
Take the letter as a warning that things may not be easy. The first thing to do is find out more about what they are doubting. You may have more evidence to support your claim than you originally sent. Check to see if they need it.
Review your policy
It is wise to read through your policy before submitting your claim, but when you suspect the insurer will play hardball, you may need help to go through it in more detail. If the insurer decides to deny that your policy covers whatever happened, they will probably use one of the more obscure clauses in the contract to do so.
How you respond to a reservation of rights letter could hasten or lengthen the remaining process. A weak reply may give the insurer hope that they can avoid payment. A strong reply lets them know you are ready to fight hard if need be.