top of page

News

NY App Div: Insurers Window to Disclaim Coverage May Be Shrinking

January 5, 2010

Share to:

If an insurance company wishes to disclaim coverage to an insured based on untimely notice of the claim, they must act expeditiously or risk being estopped from disclaiming coverage on those grounds. In <i>Scott McLaughlin Truck &amp; Equipment Sales, Inc. v. Selective Ins. Co. of Am., </i>the court found untimely a disclaimer issued by an insurance company less than two months after the insurer was on notice of a potential claim, even though the plaintiff had failed to report the claim to the insurer for nearly four years. The court noted that the timeliness of a disclaimer is measured from the moment when the insurer first learns of the grounds for the disclaimer. Here, the court concluded that Selective knew or should have known of the grounds for disclaimer on the same day they were first notified of the claim. Selective asserted that difficulties with its investigation resulted in the delay in disclaiming and generally the courts have allowed an insurer a reasonable amount of time to conduct investigation and thereafter issue an effective disclaimer. However, the case at hand suggests that New York Courts are affording insurers increasingly less time to issue timely disclaimers of coverage.
Thanks to Chris O'Leary for his contribution to this post.
<a href="http://www.nycourts.gov/reporter/3dseries/2009/2009_10030.htm">http://www.nycourts.gov/reporter/3dseries/2009/2009_10030.htm</a>

Contact

bottom of page