On Time and Complete Meets “Fairly Inform” Standard
Close
 

On Time and Complete Meets “Fairly Inform” Standard

A former client sued her attorney's malpractice insurer for bad faith after the attorney assigned the client her rights to sue the insurer. The client had lodged a malpractice claim related to a loan transaction in which the attorney failed to conduct a UCC search to identify a prior security interest encumbering the collateral. The coverage dispute focused on the reservation of rights letter (“ROR”) issued by the insurer challenging its timeliness. The Kansas Supreme Court relied on longstanding jurisprudence invoking the "fairly inform" standard to conclude an ROR may be ineffective because the insurer failed to issue it in a timely manner. This decision also serves as a reminder ROR letters must contain sufficient information informing the insured of the coverage issues in order to be effective. 

Becker v The Bar Plan Mutual Insurance Co