Tendering a Claim and Contesting a Coverage Denial: A Practical Checklist

Insurance > Liability Coverage and the Duty to Defend | Published 26 March 2026 - Updated 3 July 2026 | UpLaw - uplaw.us

How to Use This Checklist

Start at Part 1 the day a claim, demand, or lawsuit arrives. Doctrine is in the comprehensive guide; the orientation piece is four words in the policy; the letters are in the toolkit.

⚠️ Two irreversible errors. Missing the reporting deadline on a claims-made policy, and paying, promising, or admitting anything before the coverage position is known. Neither can be fixed later.

Part 1 — The First Seventy-Two Hours

☐ Diary the response deadline in the underlying case before anything else.

☐ Do not pay, promise, settle, or admit anything. The voluntary payments condition forfeits coverage for amounts paid without consent.

☐ Preserve evidence and issue a litigation hold.

☐ Photograph and secure the scene, product, or documents if physical evidence is involved.

☐ List every policy you have: general liability, umbrella, excess, auto, workers' compensation and employer's liability, professional liability, directors and officers, employment practices, cyber, garage, homeowner's, renter's, and personal umbrella.

☐ List every prior year's policy if the claim involves progressive damage, construction, environmental, or exposure over time.

☐ List every contract under which someone else promised you coverage — leases, subcontracts, vendor agreements, service agreements, franchise agreements.

☐ Pull the certificates of insurance you were given, and remember they are not coverage.

☐ Identify your broker and ask them, in writing, to identify every policy that might respond.

☐ Do not decide coverage yourself. Tender everything plausible; a tender costs a letter.

Part 2 — Building the Tender

☐ Identify the named insured exactly as it appears on the declarations, and confirm the entity being sued is that insured or an additional insured.

☐ Attach the complaint, summons, and any demand letter.

☐ Attach the incident report, photographs, and correspondence.

☐ Attach the contract requiring coverage, if this is an additional insured tender, and identify the endorsement by form number.

☐ Describe the facts neutrally and emphasize what makes the claim potentially covered.

☐ Demand both a defense and indemnity, expressly.

☐ Request the complete certified policy with all endorsements — not a specimen.

☐ State the deadline in the underlying case and ask for a response before it.

☐ Ask that any reservation identify the specific provisions relied upon.

☐ Ask whether the insurer will pay for independent counsel if it reserves.

☐ Send by email and by mail, and keep proof of both.

☐ Copy your broker.

Part 3 — Tendering to Everyone Else

☐ Tender to prior-year carriers where the damage may have begun earlier.

☐ Tender to other parties' carriers where you are an additional insured, sending the tender to the named insured and its carrier both.

☐ Send a contractual indemnity demand in parallel, and check the state's anti-indemnity statute before relying on it.

☐ Tender to your umbrella and excess carriers, even if primary limits are not threatened yet. Notice conditions apply to them independently.

☐ Tender under any homeowner's or personal umbrella policy where an individual is named.

☐ Track each tender in a log with the date, carrier, policy number, method, and response.

☐ Follow up in writing at fourteen days on any carrier that has not responded.

Part 4 — Evaluating the Response

☐ Acceptance without reservation. Confirm in writing what is accepted — defense, indemnity, or both — and whether defense costs erode limits.

☐ Reservation of rights. Read it against the policy. Does it identify specific provisions, or reserve "all rights"?

☐ Check the local rule on specificity. Some states hold unstated defenses waived.

☐ Identify the conflict. Does the reservation create a divergence in how the underlying case should be defended?

☐ Respond in writing. Accept the defense, preserve your objections, and request independent counsel if the local rule supports it.

☐ Denial. Get it in writing with the specific provisions and the factual basis.

☐ Test the denial against the complaint. Is any allegation potentially covered? One is enough to trigger a defense.

☐ Ask for the complete claim file and the coverage analysis.

☐ Silence. Send a written demand with a deadline. Silence is not a defense and, in some states, is itself a breach.

☐ Calculate your exposure if you must fund the defense yourself, and tell the insurer in writing that you will seek those costs.

Part 5 — Conflicts and Counsel

☐ Identify whether appointed counsel's decisions could affect coverage — intent, timing of damage, employment status, which claimant was injured.

☐ Request independent counsel in writing where a conflict exists, citing the local rule.

☐ Address rates if the jurisdiction caps them.

☐ Confirm reporting obligations — what independent counsel will and will not share with the insurer.

☐ Instruct any appointed counsel in writing that they represent you and may not communicate coverage-relevant information to the insurer.

☐ Consider separate personal coverage counsel even when a defense is being provided. Defense counsel does not handle coverage.

☐ Watch the verdict form. A special verdict distinguishing covered from uncovered theories may decide indemnity.

Part 6 — The Excess Demand

☐ Recognize it. A time-limited demand for policy limits, where liability is clear and damages may exceed limits, is a legal event.

☐ Notify the insurer immediately and in writing.

☐ Demand acceptance in writing, stating that any judgment above limits falls on you personally.

☐ Ask for the insurer's evaluation of the claim's value and its reasons for any refusal.

☐ Ask whether the insurer will contribute if you fund part of a settlement above limits.

☐ Ask the insurer to notify all excess carriers and to seek their consent where required.

☐ Preserve every communication. This correspondence is the bad faith case if an excess judgment follows.

☐ Consider retaining personal counsel at your own expense to protect the excess exposure.

☐ Do not let the demand expire without a written response from the insurer.

Part 7 — Coverage Litigation

☐ Decide who files first. The choice of forum matters; see the forum checklist.

☐ Confirm jurisdiction. Diversity under 28 U.S.C. § 1332, with the remedy under 28 U.S.C. § 2201 and Rule 57.

☐ Identify required parties under Rule 19, including the underlying claimant, and check the effect on diversity.

☐ Consider interpleader under Rule 22 or 28 U.S.C. § 1335 where limits are inadequate for competing claimants.

☐ Seek an early ruling on the duty to defend, which is decided from the pleadings and the policy.

☐ Seek a stay of the indemnity question where deciding it would require adjudicating facts at issue in the underlying case.

☐ Address bifurcation of bad faith and whether its discovery is stayed.

☐ Check the fee-shifting rule in the forum before deciding whether the dispute is economical.

☐ Preserve the record on damages: defense fees incurred, consequential losses, and interest.

Part 8 — Discovery in a Coverage Case

☐ Request the complete claim file, including adjuster notes, diary entries, reserve entries, and internal authority requests.

☐ Request the underwriting file, including the application, inspection reports, and internal risk assessments.

☐ Request claims manuals and guidelines applicable to this claim type.

☐ Request the reinsurance reporting where reserves or evaluations were communicated to reinsurers.

☐ Anticipate privilege objections and be prepared on the local rule: whether claim handling is ordinary business rather than work product, and whether reliance on a coverage opinion waives privilege.

☐ Depose the adjuster on the coverage analysis, the investigation, and the reserve decisions.

☐ Produce your own documents completely: policy, application, broker file, tender, defense invoices, and the underlying record. See the ESI checklist.

☐ Consider claims-handling and underwriting experts, and expect a challenge to any opinion that amounts to policy interpretation.

Part 9 — Long-Tail and Historical Coverage

☐ Build a coverage chart: year, carrier, policy number, period, limits, retention, whether defense erodes limits, attachment point, exclusion forms, trigger language, solvency, and prior releases.

☐ Reconstruct missing policies from broker files, premium ledgers, certificates issued to others, loss runs, prior litigation files, board minutes, and acquisition schedules.

☐ Identify the trigger theory the forum applies — exposure, manifestation, injury-in-fact, or continuous.

☐ Identify the allocation rule — all sums or pro rata — and what it means for uninsured or excluded years.

☐ Check each carrier's solvency and identify the applicable guaranty association, its caps, and its deadlines.

☐ Check for buybacks and commutations that released coverage years earlier.

☐ Address exhaustion before settling with any primary carrier below limits.

Part 10 — Errors That Forfeit Coverage

☐ Late notice under an occurrence policy, in a state without a prejudice requirement. ☐ Missing the reporting window on a claims-made-and-reported policy. ☐ Failing to buy the extended reporting endorsement on retirement or dissolution. ☐ Making a voluntary payment, repair, or admission before tender. ☐ Settling without consent where consent is required. ☐ Failing to cooperate, or going silent after a reservation of rights. ☐ Failing to tender to prior-year carriers on a progressive damage claim. ☐ Relying on a certificate of insurance instead of demanding the endorsement. ☐ Assuming an umbrella will defend before primary limits are exhausted. ☐ Failing to tender to a personal homeowner's or umbrella policy for an individual defendant. ☐ Allowing an excess demand to expire without demanding acceptance in writing. ☐ Accepting a general "all rights" reservation without testing it against the local specificity rule. ☐ Letting appointed counsel report coverage-relevant facts to the insurer without objection. ☐ Settling with a primary carrier below limits and losing access to the excess layer.

Part 11 — Renewal Review

☐ Read the declarations page — named insured, period, limits, retention.

☐ Read the list of forms and endorsements, and compare it to last year's.

☐ Identify new exclusionary endorsements added at renewal.

☐ Confirm whether defense costs erode limits.

☐ Confirm the trigger — occurrence or claims-made — for each line.

☐ Confirm the retroactive or prior acts date on claims-made policies.

☐ Match your actual operations to the classifications on the policy.

☐ Verify additional insured status you were promised, by obtaining endorsements, not certificates.

☐ Verify primary-and-noncontributory and waiver of subrogation endorsements where contracts require them.

☐ Confirm limits are adequate against realistic severity, not against premium.

☐ Store the complete policy in a permanent archive. Ten years from now, a claim may depend on it.

Part 12 — Reading the Policy Before You Argue About It

☐ Read the insuring agreement and identify which coverage part the claim falls under.

☐ Identify the trigger. Occurrence or claims-made; if claims-made, whether reporting is also required.

☐ Confirm the policy period covers the injury date or the claim date, as applicable.

☐ Read every defined term used in the insuring agreement — occurrence, bodily injury, property damage, insured, suit, damages.

☐ Read every exclusion in order and ask what real activity it reaches.

☐ Read every endorsement, and compare the endorsement list against the prior year's.

☐ Confirm whether defense costs erode limits.

☐ Confirm whether the insurer may settle without your consent, and whether a hammer clause shifts the excess to you if you refuse.

☐ Identify the "other insurance" clause and how it interacts with other applicable policies.

☐ Identify the conditions — notice, cooperation, voluntary payments, legal action against the insurer, subrogation.

☐ Note who bears the burden on each provision. The insured proves the insuring agreement; the insurer proves exclusions and conditions, including prejudice where required.

Part 13 — Federal Overlays to Check

☐ Is this an ERISA plan benefit dispute? If so, state bad faith claims are likely preempted under 29 U.S.C. § 1144 and the claim proceeds under 29 U.S.C. § 1132. Exhaust the plan's internal appeal first and check 29 U.S.C. § 1133 and 29 C.F.R. part 2590.

☐ Does McCarran-Ferguson reverse-preempt a federal claim? See 15 U.S.C. § 1011 and § 1012.

☐ Is a motor carrier involved? Check the MCS-90 endorsement, 49 U.S.C. § 13906, and 49 C.F.R. part 387.

☐ Is environmental liability involved? Historical policies may respond to claims under 42 U.S.C. § 9607; check the pollution exclusion form for each year.

☐ Is the insured in bankruptcy? Check the automatic stay under 11 U.S.C. § 362, whether the policy or its proceeds are estate property under 11 U.S.C. § 541, and any channeling injunction under 11 U.S.C. § 524.

☐ Is an arbitration clause in the policy? Check 9 U.S.C. § 2 and whether McCarran-Ferguson reverse-preempts it in this state.

☐ Is a punitive award at issue? Review it against Gore, Campbell, and Philip Morris.

Part 14 — Decision Trees

Does the insurer owe a defense?

1. Is there a "suit" as the policy defines it? A demand letter usually is not; an arbitration or administrative proceeding sometimes is.
2. Compare the complaint to the policy. Does any allegation, taken as true, potentially fall within the insuring agreement?
3. If yes, does an exclusion clearly and entirely eliminate every potentially covered allegation?
4. If any doubt remains, the answer is defend. Ambiguity favors the insured.
5. Could the complaint be amended to state a covered claim? In many states, that alone supports a defense.

Should I accept the defense under a reservation?

1. Yes — always accept the defense. Refusing it forfeits the benefit and does not preserve anything.
2. Simultaneously, object in writing to any reservation you dispute.
3. Evaluate whether a conflict entitles you to independent counsel.
4. Do not let acceptance be characterized as agreement with the coverage position; say so in the letter.

Is this denial worth fighting?

1. What is the defense worth? A three-year case can cost more than the policy limits.
2. What is the indemnity exposure?
3. Does the forum shift fees to a prevailing policyholder?
4. Is there a bad faith claim, and what does the local standard require?
5. Is the carrier solvent?
6. What is the cost and timeline of a declaratory judgment action, and can the duty to defend be decided early on the pleadings?

Am I an additional insured?

1. Does a written contract require it? Produce it.
2. Is there an endorsement, by form number? Certificates do not count.
3. What is the granting language — "arising out of" or "caused in whole or in part by"?
4. Does it cover ongoing operations only, or completed operations too?
5. Is it primary and noncontributory, or excess?
6. Does an anti-indemnity statute limit the arrangement?

Part 15 — Managing a Defense Someone Else Is Paying For

☐ Confirm in writing who appointed counsel and on what terms — hourly rate, billing guidelines, and whether the insurer's guidelines purport to restrict tasks.

☐ Object to billing guidelines that interfere with the defense — restrictions on legal research, on more than one lawyer at a deposition, or on retaining necessary experts.

☐ Confirm that appointed counsel represents you, not the insurer, and that professional duties run to you.

☐ Instruct counsel in writing not to communicate to the insurer any information bearing on coverage without your consent.

☐ Review the budget and the case assessment and ask for both in writing.

☐ Track defense invoices even when you are not paying them; they are damages if the insurer later denies.

☐ Attend or receive reports on every significant event — dispositive motions, mediation, expert disclosure, and settlement conferences.

☐ Participate in settlement decisions. Where consent is required, do not withhold it unreasonably; where a hammer clause applies, understand the consequence before refusing.

☐ Watch for exhaustion. Ask the carrier, in writing, for a running statement of limits remaining after defense costs if defense erodes limits.

☐ Notify excess carriers as soon as the exposure approaches the underlying limits, and continue notifying them of developments.

☐ Preserve the coverage record in parallel. Every reservation, every objection, and every response belongs in a single coverage file separate from the defense file.

☐ Do not let the coverage dispute damage the defense. Cooperate fully, produce what is asked, and appear where required, while preserving positions in writing.

⭐ A closing discipline. Once the underlying case resolves, write a one-page memo recording the resolution, the theories on which liability was or was not found, the amounts paid and by whom, the limits remaining, and every coverage position taken along the way. That memo is the foundation of any indemnity or bad faith claim that follows, and it is far easier to write while the file is fresh than to reconstruct two years later from invoices and memory.

Part 16 — Personal Lines: A Short Version for Individuals

Most people who need this checklist are not risk managers. If you are an individual who has been sued or has caused an accident, this is the whole list.

☐ Do not apologize in writing, admit fault, or promise to pay. Say you are sorry to a person if you mean it; do not write it in a text that will be an exhibit.

☐ Tell your insurance company the same day, by phone and then in writing.

☐ Send them everything you received — the lawsuit, the letter, the police report.

☐ Tell every insurer you have. Homeowner's or renter's, auto, and any umbrella policy. Personal umbrella policies frequently defend claims the underlying policy will not, and they are the most commonly forgotten.

☐ Ask for the full policy, not the summary you got in the mail.

☐ Do not repair, replace, or discard anything involved until the insurer has inspected it.

☐ Keep every letter they send you. A "reservation of rights" letter is not a denial — it means they are defending you while reserving arguments.

☐ Ask, in writing, whether they will pay for a lawyer of your choosing if they have reserved rights.

☐ Cooperate. Answer their questions, attend the examination if asked, and go to the deposition.

☐ If the other side offers to settle within your policy limits and your insurer refuses, write to your insurer immediately saying you want it settled and that you cannot pay a larger judgment. Keep that letter.

☐ If the insurer denies coverage, get it in writing, and talk to a lawyer who handles insurance coverage before you accept the answer.

☐ Do not stop paying premiums on the policy while a claim is pending.

⚠️ The most expensive personal-lines mistake is failing to report a claim at all — because it seemed small, or because of a fear that rates will rise. A claim reported late may be denied for late notice; a claim never reported leaves you funding your own defense on a policy you already paid for.

Related Documents

• Liability Insurance Coverage: A Comprehensive Guide to the Duty to Defend, Indemnify, and Settle
• Four Words in the Policy: How the Duty to Defend Actually Works
• The Tender, Reservation of Rights, and Coverage Dispute Toolkit
• Property Insurance Claims: A Comprehensive Guide to Coverage, Proof of Loss, and Bad Faith
• Filing and Appealing a Property Insurance Claim: A Practical Checklist
• Choosing a Forum, Removing a Case, and Moving to Remand: A Practical Checklist
• Issuing a Litigation Hold and Running an ESI Production: A Practical Checklist
• Drafting a Complaint, Answering It, and Moving to Dismiss: A Practical Checklist
• Negotiating a Settlement and Resolving Liens Before Distribution: A Practical Checklist
• Construction and Home Improvement: A Comprehensive Guide to Contracts, Liens, and Defects
• Employee Benefits and ERISA: A Comprehensive Guide to Plans, Claims, and Fiduciary Duties
• Running the First Seventy-Two Hours of a Security Incident: A Practical Checklist