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Workers’ Compensation Law …cont

ZG does not argue that the notice of claim was timely. Instead she argues that AIIC’s denial of coverage was itself defective and consequently may not be raised as a defense. On April 13, 1990 AIIC wrote separate letters to B.C. Enterprises, Inc. and the City of New York disclaiming coverage. The letter to B.C. Enterprises provides in pertinent part: Thus, to the extent that B.C. Enterprises did not provide any notice to Atlanta International Insurance Company of the occurrence giving rise to the claim against it by the City of New York until nine years after said occurrence, it is clear that B.C. Enterprises failed to comply with Section 4 of policy GLA 6081, requiring notice of an occurrence as soon as practical.

Accordingly Atlanta International Insurance Company expressly reserves all rights under the policy and available at law to deny coverage and/or rescind the policy on the basis of B.C. Enterprise’s failure to comply with the notice of occurrence provision in said policy.

The letter to the City of New York is similar in content.

ZG argues that the April 13, 1990 letters are merely reservation of rights letters that are ineffective to preserve an insurer’s claim of late notice. In addition ZG argues that in violation of Insurance Law sec. 3420(d), notices of disclaimer of coverage were not sent to all appropriate parties.

Insurance Law sec. 3420(d) provides: If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured party or any other claimant.

It is well settled that an insurance company may not disclaim liability if it fails to give the insured timely notice of the disclaimer as soon as is reasonably possible after it first learns of the auto accident or the ground for disclaimer. This rule applies even if the insured has failed to provide the carrier with timely notice of an accident and a fortiori applies where, as here, the sole ground for disclaiming liability is the insured’s failure to timely notify.

A perusal of the April 13, 1990 letters reveals that they are merely an expression of reservations of rights. They do not expressly disclaim liability or deny coverage. The Court of Appeals has held that letters which merely reserve the carrier’s rights to disclaim coverage are not notices of disclaimers of liability or denials of coverage within the meaning of Insurance Law sec. 3420(d). Accordingly AIIC is not entitled to disclaim liability based upon late notice of the claim to it.

In accordance with the foregoing the court: a. denies SIF’s motion for summary judgment dismissing the complaint; b. grants plaintiff’s cross-motion for summary judgment against defendant SIF on the first cause of action and against defendant AIIC on the second cause of action in the amount of $10,000.00, together with interest from October 1, 1994 and with the costs and disbursements of this action; and c. denies AIIC’s cross-motion for summary judgment dismissing the complaint.

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