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Don’t Let a Little Concealer Ruin Your Coverage Defenses

May an insurer in New York delay asserting (or conceal, according to Estee Lauder) a late notice defense without waiving it? According to the New York Court of Appeals a jury should decide whether the insurer manifested a clear intent to abandon the defense. Estee Lauder, Inc. v. OneBeacon Insurance Group, LLC, 2016 WL 4792170 (N.Y. Ct. App. Sept. 15, 2016).[1] Estee Lauder initiated this coverage action in 2005, claiming that OneBeacon was obligated to defend and indemnify Estee Lauder for environmental claims relating to Estee Lauder’s alleged dumping of hazardous waste.[2] From 1999 to 2002, OneBeacon sent various reservation of rights and declination letters to Estee Lauder. In the 1999 and 2000 letters, OneBeacon generally reserved all rights to

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Posted in Bad Faith

New York Court of Appeals to Insurers: If You Breach Your Duty to Defend, You May Lose Your Defenses to Indemnification

The New York Court of Appeals, the state’s highest court, recently held that an insurer that breached its duty to defend could not later rely on otherwise applicable exclusions to deny coverage for indemnification. Under this apparently new rule, an insurer’s wrongful failure to defend may result in the insurer’s liability for an amount up to its policy limits, even if a policy exclusion would otherwise preclude coverage for indemnification. This unanimous ruling potentially expands the indemnity obligation beyond the coverage afforded by the policy, although the court specifically affirmed the dismissal of the bad faith claims.  As the Court suggests, the filing of a pre-denial declaratory judgment action may now be an important strategic consideration.  It remains to be

Posted in Bad Faith
Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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