Under a claims-made-and-reported insurance policy, an insurer may disclaim coverage if the insured fails to report a claim made against it to its insurer during the policy period (or extended reporting period).
What happens, however, when an insurer undertakes a defense pursuant to a reservation of rights, only to discover later that the claim was, in fact, untimely? Has the insurer waived its late notice defense?
The United States District Court for the Southern District of New York (SDNY) recently addressed this issue in Hunt Construction Group v. Berkley Assurance Company, Case No. 19-cv-8775, 2021 U.S. Dist. LEXIS 183350 (S.D.N.Y. Sept. 24, 2021).
The court, following established New York law, held that ‘[i]n the context of claims-made-and-reported insurance policies, where the timing of a claim reporting establishes the contours of policy coverage, an insurer’s late-reporting defense is not subject to waiver.’