The relevance of Reservation of Rights

Written by John.Hurrell on Tue 15th of February 2011

Recent joiners to Airmic may not know that we have negotiated two agreements with our partner insurers to speed up and streamline the way claims are paid. In 2009 we reached a deal to limit the use of Reservation Rights on major claims, a tactic that generally slows the process and adds to legal and other costs.

In a nutshell, this voluntary agreement expressed as a Statement of Principles, applies on the notification of a potential loss likely to exceed £2.5ml. The insurer agrees not to initiate any formal dispute resolution proceeding nor issue any form of Reservation of Rights under the policy for a period of 90 days, during which time any investigations relating to the validity of the claim shall take place and any concerns notified to the insured in writing. Only after this period, if the concerns cannot be resolved, will the insurer issue a Reservation of Rights

This was seen as a real breakthrough agreement at the time and is in force with the following insurers: Ace, Allianz, Axa, Chartis, RSA, XL and Zurich. Simply go to www.airmic.com/reservationofrights for the full agreement and advise your insurer that you wish to invoke it. Further, please feel free to contact your own insurer, if not one of the above, and insist that they follow this agreement!

We subsequently negotiated a Speed of Settlement agreement, which sets out to ensure that the insured remains cashflow-neutral during a major property and business interruption loss. Details can be downloaded from www.airmic.com/reservationofrights

Next Events

The relevance of Reservation of Rights