The Second Department determined the insurer’s disclaimer was ineffective against the injured plaintiffs. The policy required that the insured, here the snow removal contractor (Florite), notify the insurer of any lawsuit by an injured party. The insured did not notify the insurer of the plaintiffs’ suit. After the plaintiffs were awarded a judgment, the plaintiffs notified the insurer. The insurer disclaimed coverage based solely on the insured’s failure to notify it, but did not disclaim based upon any flaw in the plaintiffs’ notification. In this situation, a disclaimer must address any flaws in both the insured’s and the injured plaintiffs’ notification:
Provisions of an insurance policy requiring an insured to provide notice of an occurrence or suit as soon as practicable have been uniformly interpreted to require that notice be given within a reasonable time under all the circumstances … . Where the required notice of suit is not provided by the insured, but rather by the injured party, the insurer’s notice of disclaimer must address with specificity the grounds for disclaiming coverage applicable to the injured party as well as the insured, “because notice of an occurrence by the injured party constitutes prima facie compliance with the notice requirements of the policy and, if unchallenged, relieves the insured of its contractual duty to provide proper notice” … .
Here, notice of the underlying action was not provided by Florite, but was provided directly by the plaintiffs in September 2010. In its subsequent notice of disclaimer, however, the insurer addressed only Florite’s failure to provide notice of the underlying action, and did not directly address the notice provided by the plaintiffs. Pollack v Scottsdale Ins. Co., 2016 NY Slip Op 06693, 2nd Dept 10-12-16
INSURANCE LAW (DISCLAIMER, INSURER WAS NOTIFIED OF PLAINTIFFS’ LAWSUIT BY THE INJURED PLAINTIFFS NOT THE INSURED; DISCLAIMER ONLY ADDRESSED INSURED’S NOTIFICATION FAILURE AND WAS THEREFORE INEFFECTIVE AGAINST PLANTIFFS)/DISCLAIMERS (INSURER WAS NOTIFIED OF PLAINTIFFS’ LAWSUIT BY THE INJURED PLAINTIFFS NOT THE INSURED; DISCLAIMER ONLY ADDRESSED INSURED’S NOTIFICATION FAILURE AND WAS THEREFORE INEFFECTIVE AGAINST PLANTIFFS)