The New York State Law Digest publishes significant procedural developments, whether they come from important decisions of the Court of Appeals or other New York state (or federal) courts, statutory or rule amendments or particular local practice issues. The Law Digest keeps NYSBA members updated on issues that impact their everyday practices of law. Edited by David L. Ferstendig, the Law Digest is published monthly and distributed to members free of charge, as a benefit of membership.
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Majority of Court of Appeals Holds That an Insurer's Failure to Disclaim Coverage Promptly Does Not Constitute an Unfair Claim Settlement Practice
Law Is Concerned with Failures to Disclose, Not to Disclaim
The facts and various issues discussed in Nadkos, Inc. v. Preferred Contrs. Ins. Co. Risk Retention Group LLC, 2019 N.Y. Slip Op. 04641 (June 11, 2019), can be a bit complicated. Thus, I am limiting my discussion here to its treatment of the interplay of Insurance Law § 2601(a) and Insurance Law § 3420(d). The former provides that certain insurer's actions, "if committed without just cause and performed with a frequency as to indicate a general business practice, shall constitute unfair settlement practices." One of those actions (under subdivision (a)(6)) is the failure to promptly disclose coverage, pursuant to §§ 3420(d) or (f)(2)(A).
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