So, I can take a shot here - and without reading the policies in question, this is just a guess.
A “reservation of rights” basically means that the insurer is agreeing to provide a defense without agreeing that they actually have any responsibility to cover you or the event in question. If RC properly tendered a demand for defense and indemnity, she may have “triggered” coverage where Barisone himself did not do that properly. It’s really hard to tell without seeing the documents.
For example, in my state, an insured who is requesting coverage merely has to prove there is any possible potential that they could be covered, where in order to deny, the insurer has to prove the absence of any such possibility.
What usually happens in this situation is:
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Once a claim exists (can be a criminal complaint, civil complaint, or simply an event eg police presence or notice from an attorney of intent to file) the first thing the lawyers will do is issue tenders (demands for defense and indemnity) to any parties with which they were contracted (often these are also codefendants) and any and all insurance carriers that may be in play - their own, that of codefendants, and anybody else including anyone downstream where any of the parties may have been a named insured.
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Once those tenders have been sent to everybody under the sun, the insurers will respond back with either a letter of coverage, a reservation of rights, or a denial of coverage. These documents will contain the specific provisions in the policy that the insurer is alleging do or do not cover the situation. Under a reservation of rights, the insurer is basically saying “you might be covered, but we reserve the right to say that you’re not and recover from you in the future if we determine that you’re not.”
If I were a betting person I would bet this situation exists based on a technicality. I did some research and NJ is a “four corners” state which basically means the duty to defend is determined based on the allegations in the complaint at issue. At the time the tenders were issued, one party may not have had a criminal or civil complaint yet while the other party was already under arrest. The technicality may in fact be that the contract provisions held that the exclusion was for acts of an insured, which RC was not and therefore the policy actually does bind.
Insurance is a pain in the a** and is often counterintuitive. There are attorneys whose sole speciality is litigating insurance coverage on behalf of insureds.