A coverage opinion analyzes the policy against the claim, addressing the insuring agreement, applicable exclusions and conditions, the duty to defend, and any reservation or denial recommendation.
It is prepared for the insurer by coverage counsel, separate from defense counsel representing the insured.
Alternative Names:
Coverage Opinion, Coverage Analysis Letter
Why it Matters?
The opinion is the foundation for the carrier's coverage position and becomes central evidence if bad faith is later alleged, since it shows what the insurer was advised and when. That creates a waiver problem: a carrier defending bad faith by asserting reliance on counsel's advice generally waives privilege over the opinion and the underlying analysis. The decision to assert that defense should be made with the consequence understood.
Frequently Confused with
Related terms
Frequently asked questions
Is a coverage opinion privileged?
Who prepares the opinion?
