NY Appeals Court Rejects Precedent On Coverage Notices

Law360, New York (January 18, 2012, 5:01 PM EST) -- In a coverage fight over a subcontractor's injured employee, a New York appeals court on Tuesday overturned a precedent to rule that insurers cannot delay notifying policyholders about known grounds to deny coverage while investigating other potential exclusions for coverage.

The appeals court for New York's first judicial department shot down the so-called DiGuglielmo rule, which allowed insurers to put off telling policyholders their claims would be denied on timeliness grounds until after they completed a prompt, reasonable investigation into other possible grounds to avoid providing...
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