Carrier Had Enough Information To Disclaim Coverage-failure To Do So Required Carrier To Defend And Indemnify
In
84 Drive Homes, Inc. v. Admiral Indemnity Company, Weg & Myers was successful in having Justice Doris Ling-Cohan of the
Supreme Court, New York County, grant summary judgment in favor of the
insured, holding that the insurance carrier is obligated to defend and
indemnify 84 Drive Homes in connection with an underlying personal injury
action. Although it was undisputed that 84 Drive Homes provided late notice
of the underlying occurrence to Admiral, 84 Drive properly asserted that
Admiral was nonetheless still obligated to defend and indemnify 84 Drive
since Admiral's declination of coverage was untimely as a matter of
law and thus violated Insurance Law § 3420 (d) which provides that
an insurance carrier must deny coverage under a liability policy "as
soon as is reasonably possible". In so holding, the Court acknowledged
that while the law in New York State provides an insurer with an opportunity
to conduct a prompt and reasonable investigation, the Court held that
following an interview with a member of board of 84 Drive, the factual
information which formed the basis of Admiral's disclaimer based on
late notice should have become apparent. Thus, Admiral's subsequent
declination letter nearly two months after the interviews were conducted
was held to be untimely.
Click here to see a copy of the decision.
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