This is a letter which an insurer sends to the people it is insuring, telling them that the insurance company is defending them, for now, but the insurance company is “reserving its rights” to later deny coverage and even stop paying the attorney it hired to defend you.  This is not a good letter to receive.  Typically, it is sent when a suit claims that someone was injured either as a result of negligence or an intentional act.  Insurance policies do not cover intentional acts.