Prompt Pilotby Write.law
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Draft

Draft a coverage position letter

Produces a carrier-side reservation of rights, partial denial, or full disclaimer that quotes the actual policy language by form and section, keeps decided positions visibly separate from reserved ones, and never claims the investigation found more than it did.

About 20 minintermediateInsurance

Your prompt5,294 characters

Still to fill in: Policy language at issue, Claim facts and investigation status, Insured, policy, and claim reference, Governing law

RoleYou are coverage counsel for insurers who has seen too many position letters come back as Exhibit A in a bad-faith case. You quote the policy rather than paraphrase it, you never describe the investigation as further along than it is, and you keep decided positions visibly separate from reserved ones.What I needDraft the Reservation of rights: defending under reservation to Insured, policy, and claim reference under the law of Governing law.InputsPolicy language: Policy language at issue Claim facts and investigation: Claim facts and investigation status Insured, policy, and claim: Insured, policy, and claim reference Governing law: Governing law Type of letter: Reservation of rights: defending under reservation Still open: Still openHow to work this1. Name the triggering document and the date the carrier received it, from Claim facts and investigation status. If that date is not in my inputs, write [DATE RECEIVED - insert] rather than supplying one. 2. Walk the policy in this order and no other: insuring agreement, the defined terms it turns on, each exclusion relied on, any exception to it, then the conditions. Quote operative words verbatim from Policy language at issue with form and section. 3. Sort every coverage issue into exactly one bucket, never two: Position taken: decided, with the language and facts driving it; Reserved: why, and the one fact that would resolve it; Not yet evaluated: no position. 4. Every reservation names a provision by section. The general reservation of all rights follows the specific ones and never substitutes for them. 5. Describe the investigation only as far as Claim facts and investigation status supports. Never claim it is complete, that all material facts are known, or that the insured fully cooperated. 6. Say in one sentence whether a defense is being provided and on what showing the carrier would withdraw. Turn Still open into a dated document request. 7. Do not state Governing law's disclaimer deadline or content requirement from memory. Insert [CONFIRM - Governing law disclaimer timing and content] and keep drafting.Close with these four sections, every time, without being askedAssumptions I made. Every factual, policy, and legal assumption behind the letter, marked [verify] or [safe]. Say so if you assumed which state's law governs or that an undefined policy term carries its ordinary meaning. Where this is weakest. The two or three sentences most likely to be used against the carrier: an assertion the file cannot support, or a reservation too thin to preserve the defense. Name the paragraph. What only you can decide. Options with tradeoffs, never a bare flag. At minimum: reserve on late notice now: preserving it, but in a prejudice state a reservation the file cannot support hands the policyholder its bad-faith theme, or hold it until the investigation supports it; defend under reservation, which keeps control of the defense but costs money and in some states triggers independent counsel at carrier expense, or disclaim outright, which stops the spend but invites estoppel and lets the insured pick counsel; and whether to sue for a declaration now or let the underlying case develop the facts. What would make this materially better. Ranked by impact: the complete policy with declarations and endorsements, the underlying complaint, and the confirmed date of first notice.Output formatA letter for carrier letterhead: RE line with insured, policy, claim, and suit; trigger and date received; the defense position in one sentence; coverage analysis with quoted language; reservations listed by provision; a dated document request. Then the four sections above.Never do this- If the letter would read the same for any insured under any policy in any state, it is too generic. Every position rests on quoted language and a fact from my inputs. - No hedging filler. Cut "arguably," "it should be noted," and "coverage may or may not apply" used in place of a position. Do not tell me to consult an attorney. I am the coverage attorney. - Never invent policy language, a form number, a date, a statute, or a case. Anything not in my inputs is marked [UNVERIFIED - confirm against the policy and current Governing law law]. - Where you do not know how Governing law treats an exclusion or a notice condition, say you do not know. A confident wrong deadline is how carriers waive defenses. - Do not pad. If one exclusion carries the position, the letter is two pages. Length is not value. - Never write that the insured waived anything, or that coverage is denied in full while a defense is being provided.Before you answer- Is every position tied to quoted policy language with a form and section, and does every reservation name a provision rather than rest on "all rights"? - Did I assert an investigative finding my inputs do not support? - Did I state a requirement of Governing law law from memory instead of flagging it? - Would this letter fit a different claim under a different policy? It should not.

Adds driver's-seat tunes: options instead of answers, questions before work, every citation flagged. Your values come with it.

2

Pressure-test it

Makes the AI switch hats and attack its own answer.

This letter is going to be Exhibit A to a bad-faith complaint. Read it as the policyholder's coverage counsel who already intends to plead that count and is looking for the three things that make her case: a defense the carrier failed to reserve and therefore waived, a factual assertion the claim file cannot support, and a boilerplate reservation too vague to preserve anything. Quote the sentences she would attach to her complaint, then rewrite each one so it survives her.
3

Go deeper

Pushes the work further once the basics are right.

What the insured receives and what the claim file records are two different documents. Draft the internal coverage memo behind this letter for the claim file: a coverage chart by count, the facts cutting against the carrier stated as plainly as the facts supporting it, the open investigative steps with owners and dates, an estimate of defense and indemnity exposure, and a recommendation on whether to file a declaratory judgment action. Two pages.

Before you run it

What to gather first

  • The full policy: declarations, insuring agreement, the exclusions you rely on, and every endorsement that touches them
  • The complaint, demand, or proof of loss, plus the date the carrier received it
  • What the claim file actually establishes versus what is still open
  • Whether a defense is being provided and by whom
  • Any state-specific disclaimer deadline or content requirement you have already confirmed

Watch for

  • Disclaimer deadlines and content requirements are statutory in several states and unforgiving. Confirm the rule that governs this policy before sending. The model will supply a deadline confidently and may be wrong.
  • This letter is discoverable and becomes the centerpiece exhibit in any bad-faith case. Assume a jury reads every sentence alongside the claim file notes.
  • Reserving too generally can waive the defense; reserving on a ground the file does not support can itself become evidence of bad faith. Both mistakes look identical on the page.
  • The model sees only the policy language you paste. Declarations, endorsements, and manuscript wording routinely change the analysis. Omit them and the letter is wrong.
  • In several states, defending under a reservation of rights on a ground that controls the underlying outcome triggers the insured's right to independent counsel at the carrier's expense. Check before reserving on that ground.

What comes back

A letter ready for carrier letterhead: RE line identifying insured, policy, claim, and underlying suit; the triggering document and date received; a one-sentence statement of the defense position; coverage analysis walking insuring agreement to conditions with policy language quoted by form and section; reservations listed individually by provision; a dated request for outstanding information; and an invitation to submit anything bearing on coverage. Closes with Assumptions / Where this is weakest / What only you can decide / What would make this materially better.

See an example of what you’ll get
RE: Alvarez v. Ridgeline Framing LLC, Sup. Ct. Suffolk Cty. Index No. 610442/2026 | Policy No. CPP-4471902 | Claim No. 26-00381 Dear Mr. Okafor: Meridian Casualty received the summons and complaint in the above action on March 4, 2026. Meridian will provide Ridgeline Framing LLC with a defense in this action, subject to the reservations set out below, and has retained Brennan & Voss LLP to appear on Ridgeline's behalf. Position taken: Coverage A applies to the resulting-damage count. Count III alleges that water entering through the flashing damaged interior finishes, insulation, and cabinetry at 44 Harbor Row that Ridgeline neither installed nor was retained to install. Form CG 00 01 04 13, Section I, Coverage A, insures sums the insured becomes legally obligated to pay as damages because of "property damage" caused by an "occurrence." Damage to property other than Ridgeline's own work falls within that grant, and no exclusion identified to date removes it. Reserved: the property-damage counts. Counts I and II seek the cost of removing and replacing the framing and flashing at 44 Harbor Row. Meridian reserves under exclusion j.(6), which excludes property damage to "[t]hat particular part of any property that must be restored, repaired or replaced because 'your work' was incorrectly performed on it," and under endorsement CG 22 94, which deletes the subcontractor exception to the "your work" exclusion in exclusion l. Whether these apply turns on which components were installed by Ridgeline's own crews and which by its subcontractor, a fact the engineering report of February 18, 2026 does not resolve. Reserved: Condition IV.2.a, notice. The complaint alleges the condition was discovered in November 2025. Meridian's file reflects first notice on February 2, 2026. Meridian reserves its rights under the notice condition pending confirmation of when Ridgeline first knew of the claim. [CONFIRM - New York disclaimer timing and content requirements under Ins. Law § 3420(d)(2) before this reservation is relied on as a disclaimer.] Not yet evaluated. Count IV pleads a breach of contract theory. Meridian has taken no position on whether the amounts sought under that count constitute "damages because of 'property damage'" and will advise once the record develops. Meridian's investigation to date consists of the engineering inspection of February 18, 2026 and review of the complaint and the policy. It is ongoing. Meridian additionally reserves all rights under the policy and at law, including the right to withdraw from the defense on reasonable notice if it is determined that no covered claim remains. Please provide by April 3, 2026 the subcontract and certificate of insurance for the flashing subcontractor, and Ridgeline's project correspondence for November and December 2025. --- Assumptions I made. New York law governs [verify - the policy pasted contains no choice-of-law provision]. The engineering report attributes the flashing to a subcontractor but does not identify who installed the framing [verify]. "Your work" as used in CG 22 94 has the meaning given in Section V.22 [safe - quoted in inputs]. Where this is weakest. The notice reservation. The letter states first notice as February 2 based on the absence of a log entry, not on an affirmative fact. If the insured produces a December call record, that paragraph becomes the policyholder's best bad-faith exhibit. Consider rewriting it to reserve on the condition without asserting a date. What only you can decide. Whether to reserve on notice now: preserving the defense, but committing to a factual position the file does not yet support, or to reserve generally on "all Section IV conditions" and pin the date after the superintendent's statement. Also yours: defend under reservation, which keeps Brennan & Voss in place, versus disclaim Counts I and II outright, which cuts spend but may hand Ridgeline independent counsel on the counts you are still defending. What would make this materially better. (1) The confirmed date of first notice from the agent's file: it decides the strongest reservation. (2) The subcontract scope of work. (3) The declarations page, which was not pasted and may carry endorsements not reflected here.
Why this prompt is built the way it is
## Framework 1. **Start with the trigger.** Identify the complaint, demand, or proof of loss and the date the carrier received it. Coverage timing runs from that date. 2. **Walk the policy in order.** Insuring agreement, then the definitions the words depend on, then the exclusions relied on, then exceptions to those exclusions, then conditions. Never lead with an exclusion. 3. **Three buckets, never blurred.** Position taken, Reserved, Not yet evaluated. Each coverage issue lands in exactly one. 4. **Specific reservations.** Every reservation names a provision by section. The general reservation of all rights follows the specific ones; it does not replace them. 5. **Describe the investigation honestly.** What was reviewed and when. Never "the investigation is complete" unless it is. 6. **Say plainly whether a defense is being provided.** One sentence, no ambiguity, plus the conditions for withdrawal. 7. **Flag state-law timing rather than reciting it.** Disclaimer deadlines and content requirements are statutory in several states and get confirmed, not remembered.