The Perils of Untimely Disclaimer

This Appellate Division – Second Department decision and order reversed the Supreme Court, Richmond County decision and order that found the Continental Casualty Insurance Company was not obligated to defend or indemnify its insured in two actions.

This decision outlines what an insurance carrier must demonstrate in order to properly deny coverage based upon lack of cooperation. More notably, this decision pits an insured’s failure to cooperate against a carrier’s obligation to timely disclaim “as soon as is reasonably possible” pursuant to CPLR 3420. In this case, it was found the carrier failed to timely disclaim, causing it to be obligated to defend and indemnify.