The Second Department determined that the insurer’s (Merchant’s) disclaimer letter did not identify the basis for the disclaimer relied upon in this declaratory judgment action. Therefore the defense ultimately relied upon was waived:
When an insurer disclaims coverage for death or bodily injury arising out of an accident, “the notice of disclaimer must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated” … . “An insurer’s justification for denying coverage is strictly limited to the ground stated in the notice of disclaimer” … . “Thus, an insurer waives any ground for denying coverage that is not specifically asserted in its notice of disclaimer, even if that ground would otherwise have merit” … .
In its disclaimer letter, Merchants stated, in relevant part, that Ability was not named as an additional insured under the insurance policy, a statement that was factually incorrect. Contrary to Merchants’ contention, the exclusion upon which Merchants now relies was not mentioned in its disclaimer letter and, therefore, any argument based on that exclusion has been waived … . Ability Transmission, Inc. v John’s Transmission, Inc., 2017 NY Slip Op 04087, 2nd Dept 5-24-17
INSURANCE LAW (ANY GROUND FOR A DISCLAIMER NOT MENTIONED IN THE DISCLAIMER LETTER IS WAIVED)/DISCLAIMER (INSURANCE LAW, ANY GROUND FOR A DISCLAIMER NOT MENTIONED IN THE DISCLAIMER LETTER IS WAIVED)