The defense of late notice is as critical to your insurer as tears are to an episode of “The Bachelorette.” It’s “a crucial tool used by insurance companies when defending against a policyholder in a coverage dispute,” notes Larry Schiffer of Squire Patton Boggs. And a recent case from a New York intermediate appellate court pontificated on when and how an insurer can implement the defense.
“When an insurance company disclaims coverage, it must do so with particularity,” says Schiffer. “In other words, if late notice is a basis to disclaim coverage, then late notice of claim should be stated expressly (as) a reason for the disclaimer in the disclaimer letter.” This didn’t happen in the case at issue, and the appellate court originally said that the insurance company’s failure to specify late notice in the disclaimer letter meant it couldn’t rely upon it later.
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