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.