APPENDIX 8 FORM LETTER: RESERVATION OF RIGHTS LETTER B—LONG FORM

• Jurisdiction: United States

ABC INSURANCE COMPANY

________________, Esq.
____________________
____________________
____________________

Re: __________________________
Policy Number: ________________
SGD File Nos: _________________
Date of Loss: __________________
Insured: ______________________

Dear Mr. ___________:

As you know I am the claims representative for ABC Insurance Company.

ABC's investigation is continuing. That investigation is being conducted pursuant to a full reservation of rights as outlined in detailed communications concerning similar suits and a complaint for declaratory relief presently pending in the Superior Court of California, County of Los Angeles.

ABC Insurance Company believes, after completing its investigation to date that it must further clarify the reservations it has about your client's claim for defense and indemnity and respond to your latest demand for defense, as follows:

THE POLICY

ABC Insurance Company policy number __________ issued to _____________ was in effect when some of the acts complained of in the lawsuit filed by various parties plaintiff and cross-complainant occurred. The policy provides insurance to _______ and all others who qualify as insureds, or additional insureds by the terms of the policies, for defense, and if needed, indemnity up to a maximum limit of liability of $1,000,000 regardless of the number of insureds, or additional insureds __________________________ is called upon to defend and regardless of the number of occurrences.

The policy referred to above provides, in relevant part:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

A. bodily injury or

B. property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such property damage, even if any of the allegations of the suit are groundless, false or fraudulent.

The policy contains the following self-explanatory definitions:

‘Occurrence' means an accident, including continuous or repeated exposure to conditions, which results in property damage neither expected nor intended from the standpoint of the insured.
‘property damage' means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.

The basic CGL also contain a Broad Form endorsement which modifies exclusion (o) of the CGL to read:

(3) with respect to the completed operations hazard and with respect to any classification stated in the policy or in the company's manual as ‘including completed...