Wednesday, August 6, 2014

Late Notice in New York – Part II Recent Court of Appeals Ruling Rejects Expansion of Current Law

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In a recent blog I discussed how a Second Circuit Court of Appeals case, Fabrozzi v. Lexington Insurance Company,1 interpreted the law regarding “Late Notice” expansively in favor of policyholders. A recent New York State Court of Appeals ruling has failed to continue this expansion and has left the law as it was regarding a carrier’s duty to deny a claim based on late notice.

In Keyspan Gas East Corporation v. Munich Reinsurance America, Inc.,2 the New York Court of Appeals ruled against the plaintiff, Keyspan, by refusing to expand the reach of a New York law that requires liability insurers to promptly disclaim coverage on the basis of late notice in cases involving accidental death and bodily injury. The plaintiff sought to expand the law to include additional claims including those involving property damage and pollution cleanup.


Had the court found in the plaintiff’s favor, it would have dramatically altered the claims handling process in New York. It…


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