Asked by Elizabeth Ridgeway on Jun 12, 2024
Verified
Sometimes,an insurer may retain an attorney to defend the insured in a liability case but can conclude later on,based on additional information,that it does not have the obligation to pay any damages that may be assessed against the insured as a result of the third party's claim.It can do so through a(n) :
A) equity of redemption.
B) advance directive.
C) reservation of rights notice.
D) declaratory judgment.
Reservation Of Rights Notice
A Reservation Of Rights Notice is a statement issued by an insurer indicating that it may not cover a claim, reserving its right to deny coverage in the future after further investigation.
Declaratory Judgment
A court judgment that clarifies the legal positions of the parties without requiring action or award damages.
Liability Case
A legal case involving the determination of someone's responsibility for damages or losses incurred by another party.
- Recognize the legal principles underlying the obligation of insurers to defend and indemnify the insured.
- Comprehend the role of declaratory judgments in resolving insurance disputes.
Verified Answer
SH
Salar HaiderJun 14, 2024
Final Answer :
C
Explanation :
By providing the reservation of rights notice to the insured,the insurer indicates that it reserves the right,upon acquisition of additional information,to conclude (or seek a later judicial determination)that it does not have the obligation to pay any damages that may be assessed against the insured as a result of the third party's claim.
Learning Objectives
- Recognize the legal principles underlying the obligation of insurers to defend and indemnify the insured.
- Comprehend the role of declaratory judgments in resolving insurance disputes.