If It Looks Like A Disclaimer And Sounds Like A Disclaimer, It’s A Disclaimer

In the previous post, we addressed the case of QBE Insurance Co. v. Jinx-Proof, where the New York Supreme Court held that as assault and battery exclusion was applicable to deny coverage even when the underlying plaintiff alleged negligent acts of the insured, if the alleged action was rooted in intentional tortuous behavior. Another issue in that case was whether QBE properly disclaimed coverage to the insured.

The insured argued that QBE never properly disclaimed coverage. QBE sent the insured two “reservation of rights” letters regarding the underlying suit. The court noted that, while reservation of rights letters may not be effective notices of disclaimer, there is no magic formula that separates a reservation of rights letter from a denial of coverage. The QBE letters clearly denied coverage for assault and battery claims, indicating that QBE “will not be defending or indemnifying you under the General Liability portion of the policy for the assault and battery allegations.” The was sufficient because QBE notified the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based.”

This decision supports the argument that it is the content of any communication that is important, not the title of the communication. While a specific denial of coverage letter is still preferred, as long as the carrier informs the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based” the communication should be sufficient.

If you would like more information regarding this post, please contact David Tavella at dtavella@wcmlaw.com.

http://pdf.wcmlaw.com/pdf/jinx-proof.pdf