New York Insurance Coverage Law Update – June 2022 | Rivkin Radler LLP

Northern District argues late notice prohibits coverage under property policy

In late 2016, a roofer breached the insured’s roof, causing roof damage and internal water damage. The insured did not file a claim with his property insurer until early 2018, more than a year later. The insurer, Acadia Insurance Company, reserved the rights, investigated, then withdrew due to late notice under the policy, which required prompt notice of a claim. The United States District Court for the Northern District of New York granted summary judgment to the insurer stating that the insured’s late notice precluded coverage under the property policy, whether the insurer had or not suffered damage. The court found that the insurer had not waived its defense of late notice because it reserved rights and then withdrew. As such, “no reasonable jury could conclude” that the insurer “willfully and intentionally waived its late notice argument.” The court also found that the insured’s belief that the loss would not exceed his deductible was not a reasonable excuse because the policy required that “all losses must be reported as soon as possible if they are to become the basis of ‘a claim’ and, in any event, the notice was late because the insured waited ten months to give notice even after knowing that the deductible would be exhausted. [13 State St. LLC v. Acadia Ins. Co., 2022 U.S. Dist. LEXIS 83013 (N.D.N.Y. May 9, 2022).]

Southern District finds no coverage under landlords policy because premises were more than ‘four family accommodation’

The insured, owner of a multi-unit apartment building in Brooklyn, sued his home insurer, Nationwide, after it refused to cover losses suffered by the insured as a result of a fire in the building. The policy covered ‘residential premises’, defined as ‘the dwelling of one, two, three or four families’ at the ‘address shown on the declarations’. However, the building contained at least six living units. The United States District Court for the Southern District of New York granted summary judgment to the insurer, finding that the six-family units are not covered by the policy. The court rejected the insured’s “scathing” argument that the wording of the policy was ambiguous because he used the term “family dwelling” instead of “apartment building”. The court also rejected the insured’s argument that Nationwide should have inspected the property before issuing the policy. [Koczwara v. Nationwide Gen. Ins. Co., 2022 U.S. Dist. LEXIS 84485 (S.D.N.Y. May 10, 2022).]

Court issues jury instructions for environmental blanket trial

The New York Supreme Court for New York County has issued instructions to the jury in a two-decade-old blanket dispute over whether Century Indemnity must cover Brooklyn Union’s environmental remediation costs under the excess policies issued by Century from 1941 to 1969. The policies covered costs only if Brooklyn Union proved that the environmental damage was accidental, rather than foreseen or intentional by Brooklyn Union. As for when to assess whether the damage was accidental, the court decided to instruct the jury that the inquest is about what Brooklyn Union knew or did not know at the time of the acts that caused the damage as opposed to what that he knew or did not know at the start date of each policy. As to how to instruct the jury on whether Brooklyn Union had proven the damage was accidental (rather than expected or intentional), the court rejected the insurer’s proposal to include a sentence that ” if the plant operator was aware of a substantial likelihood of harm,” the jury may conclude that the harm was not accidental. [Century Indem. Co. v. Brooklyn Union Gas Co., 2022 N.Y. Misc. LEXIS 1971 (Sup. Ct. N.Y. Cnty May 11, 2022).]


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Justin D. O'Neill