New York Business Litigation Attorney | New York Breach of Contract Attorney » insurance policy

Late Notice to Insurer Not Fatal to Claim Under New York Law, Federal Court Holds

Jonathan Cooper — Wed, 09 Sep 2009 20:02:00 +0000

In an opinion that was published in today’s New York Law Journal, a Federal judge refused to hold as a matter of law that an insurance company’s disclaimer of coverage was proper – even though the insured did not report the underlying incident giving rise to the claim until over a year had passed.

In this particular case, the jacuzzi maintenance company, Northway Pool Service, Inc., did not notify their insurance company about an incident wherein one of their customers died while in the hot tub because based upon the police’s questioning regarding the incident, they did not believe that they had any liability for the accident. More specifically, they didn’t notify the insurance company until more than one year later, when they were served with a summons and complaint seeking damages for wrongful death.

Atlantic disclaimed coverage for the loss, citing Northway’s failure to timely notify them about the occurrence, and then brought this lawsuit seeking a Court Order to confirm the propriety of their disclaimer. In denying the insurance company’s motion, however, the Court acknowledged that while an insured’s failure to timely notify its insurer of an occurrence will generally vitiate coverage, there is also an important exception to this rule: where a reasonable person standing in the insured’s shoes would believe that they had no liability; stated differently, where the insured is justified in believing that he would not be sued for this occurrence.

At the risk of redundancy (see, “Why It May Pay to Fight an Insurer’s Disclaimer of Coverage“), you should never assume that an insurer’s disclaimer of coverage, or refusal to honor your insurance contract is valid.

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NY’s High Court Finds Insurer Required To Defend & Indemnify Landlord – Even Though Landlord Not Named As Additional Insured

Jonathan Cooper — Fri, 03 Jul 2009 03:18:14 +0000

In a decision that was handed down on June 25, New York’s Court of Appeals was confronted with an unusual question: under what circumstances can someone (or, as in this case, a small business in New York) be deemed an additional insured on an insurance contract (such that the insurance company is obligated to defend and indemnify them against a personal injury claim under the policy), even if they are not actually named as additional insureds on the insurance policy?

Although you would think that the answer to this question is probably “never,” you’d be mistaken; in Cassis v. Ohio Cas. Ins. Co., the Court of Appeals (New York’s highest court) held that since the landlord’s underlying contract with its tenant (the insured) obligated the tenant to procure proper insurance that named the landlord as an additional insured on its own commercial liability insurance policy, and the tenant’s policy expressly stated that coverage would be provided to anyone that the tenant was obligated to name as an additional insured on this policy pursuant to a written contract or agreement, the insurer must be held on the hook to cover the landlord.

At first blush, this decision would perhaps present a significant area of concern for insurers. However, a more careful reading of this decision suggests that the Court deemed the facts of this case somewhat unique (I, for one, do not recall ever seeing such language with regard to additional named insureds being employed in an insurance policy), and that this case is of limited precedential value. Time will tell.

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