NY Appellate Court Clarifies Timely Disclaimer Statute in Claims Between Carriers

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JT Magen v Hartford Fire Ins.

(1st Dept May 20, 2009)

The court revisted its prior decision in Bovis Lend Lease, LMB v Royal Surplus Lines Ins. Co. (27 AD3d 84 [2005]), which held that the timely notice disclaimer requirements of Insurance Law 3420(d) did not apply to claims between coinsurers. Here, the court held that a disclaimer by Hartford was late pursuant to the statute, despite the fact that notice was given by a coinsurer, Travelers. The court reasoned that Travelers provided notice on behalf of the additional insured on the Hartford policy. At that point, Hartford owed an obligation to timely disclaim to the additional insured and did not. As such, it was precluded from asserting its condition based defense of late notice.

By Daniel W. Gerber and Sharon Angelino