News & Events / Second Circuit Offers Policyholders Painful Reminder on Giving Notice of Claims: Don’t Wait, Use Correct Addresses, and Be Specific
Second Circuit Offers Policyholders Painful Reminder on Giving Notice of Claims: Don’t Wait, Use Correct Addresses, and Be Specific
Authors: John H. Kazanjian, Nicole B. Weinstein
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In January 2017, the Second Circuit ruled that policyholders must actually or presumptively give their insurers notice of specific policies under which they seek coverage—mailing a notice of the claim may not be enough. Travelers Indemnity Co. v. Northrop Grumman Corp., No. 15-3117-CV, 2017 WL 391926 (2d Cir. Jan. 27, 2017).
In Northrop Grumman, the policyholder sought coverage from two of its primary and excess liability insurers for alleged trichloroethylene (TCE) contamination dating back to the 1940’s at its naval aircraft manufacturing and testing facility in New York. The policyholder provided its broker with a package of information to transmit to its insurers that included a potentially responsible person (PRP) letter alleging contamination at the facility. Although the broker attempted to forward the information on to the insurer, the broker used an incorrect address that the insurer had itself provided in connection with a separate claim relating to offsite contamination at a landfill stemming from the facility’s operations. Because the information was directed to an incorrect address, the court held that there was no presumption that the insurer received the information.
A copy of the same package containing the PRP letter was sent to a second insurer, along with the claim letter addressed to the first insurer and focusing on the landfill claim. Because the letter was addressed to the wrong insurer, the package necessarily neglected to identify the particular policies for which the policyholder was seeking coverage. Although the insurer had actual notice of the underlying circumstances from the enclosed PRP letter, relying on a New York Court of Appeals decision, the court held that the policyholder had not fulfilled its “obligation to provide separate notice as to each policy under which it seeks coverage.”
The court also agreed that notice was untimely for a third claim based on a 47-day or more delay from when the policyholder knew of the claim, citing to a case in which 36 days was considered untimely as a matter of New York law.
Here are several key takeaways from this decision for policyholders:
Beveridge & Diamond’s Insurance Recovery Practice represents policyholders in evaluating their insurance programs, negotiating policies to best protect their needs, and pursuing coverage after a loss. For more information, please contact the authors or any member of our Insurance Recovery Practice.