In a recent update on New York insurance coverage law, the Eastern District found that a delay by insurer Prime Insurance Company in disclaiming, after its insured Extreme Residential Corp. gave a notice of occurrence, precluded the insurer’s reliance upon exclusions. The judgment arose out of a construction accident that took place on July 30, 2019, which led to a lawsuit against several entities involved in the project.
Two employees of Extreme Residential Corp. were involved in the accident, and the subsequent lawsuit triggered a third-party action against Extreme. The insurer, Prime Insurance Company, offered a disclaimer based on several exclusions, but it was not until March 11, 2021 – roughly six months later – that it did so.
The Eastern District’s decision underscores the necessity for insurers to act promptly when an insured party notifies them of an occurrence. Failing to disclaim promptly, as in the case of Prime Insurance, may negate the insurer’s ability to rely on policy exclusions.
Arguably, the judgment can serve as a significant reminder for legal practitioners in corporate entities and law firms grappling with insurance law issues. It points to the cruciality of timing and communication between an insurance company and its insured party, showing how any delay might potentially impact the outcome of a case.
For more in-depth details, refer to the extensive legal update at: www.jdsupra.com.