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Renewal Application Creates No Obligation for Coverage

May 19, 2017

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“He who represents himself has a fool for a client”  - a saying often attributed to Abraham Lincoln, and just last week apparently co-signed by the Appellate Division of the New Jersey Superior Court in <a href="">Sicari v Hartford Insurance Company of the Midwest</a>.
The Plaintiff attorney appeared <em>pro se</em> in the action.  He obtained insurance through Hartford for 2010-2011 to cover his law practice, including coverage for general liability, business property liability, and lawyer’s professional liability.  He paid over $2,000 in premiums.  In May 2011, Hartford sent Plaintiff a letter advising that they were “no longer writing lawyer’s professional liability coverage.”  Plaintiff testified he never received Hartford’s notice.
In June 2011, Plaintiff sent Hartford a renewal application for lawyer’s professional liability coverage, to which he received no response.  Hartford then issued insurance policies to Plaintiff for the years 2011-2012, and 2012-2013.  These policies did not contain lawyer’s professional liability coverage, a fact the Court noted was suggested by a drastic reduction in premiums.
In July 2013, Plaintiff found himself the subject of a potential malpractice claim, and only then did he “discover” he no longer had professional liability coverage.  His suit against Hartford sought retroactive coverage based on Hartford’s failure to notify him of the decrease in coverage, and a contractual obligation to provide coverage ostensibly triggered by his renewal application and Hartford’s failure to adequately respond to same.  The Court was unmoved by Plaintiff’s arguments, noting “an insured is chargeable with knowledge of the contents of a policy.”
Although the case represents a confirmed victory for Hartford, the Court provided one bit of practical advice to insurance providers:  when in receipt of a renewal application, “the better practice would [be] to notify the [insured] or the broker” that the coverage requested will not be renewed or is no longer offered.
Thanks to Vivian Turetsky and Christopher Soverow for their contributions to this post.


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