{"id":2375,"date":"2013-12-09T06:31:26","date_gmt":"2013-12-09T13:31:26","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=2375"},"modified":"2013-12-03T13:32:02","modified_gmt":"2013-12-03T20:32:02","slug":"can-insurer-raise-exclusion-denial-letter","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/can-insurer-raise-exclusion-denial-letter\/","title":{"rendered":"Can an Insurer Raise an Exclusion After the Denial Letter?"},"content":{"rendered":"

Christopher Nahas – November 27, 2013<\/p>\n

Is an Insurer\u2019s right to raise a policy exclusion waived when it fails to identify the exclusion in its denial letter or disclaimer? Not in New York. In fact, this is the case in most jurisdictions. Generally, the doctrines of waiver and estoppel are not applicable in the context of coverage of policy risks which are either expressly excluded or not covered under the terms of the policy.1<\/p>\n

This issue came up while I was discussing a case with two of my colleagues. A carrier had failed to incorporate an applicable policy exclusion in its denial letter disclaiming coverage and we were debating whether in so doing the carrier had waived its right to assert the exclusion as a defense. As it turns out it did not\u2026at least not in New York.<\/p>\n

The case law is well settled on this matter. Justice Mercure, in Perras v. Transportation Insurance,2 held that an insurer\u2019s failure to disclaim coverage on a breach of contract claim on the grounds that breach of contract losses were not covered under the policy did not effectuate a waiver of the insurer\u2019s rights to disclaim coverage on that ground.3 In Schiff v. Flack4 the court found \u201cwhere the issue is the existence or nonexistence of coverage (e.g., the insuring clause and exclusions), the doctrine of waiver is simply inapplicable.\u201d5<\/p>\n

The doctrine has been re-affirmed at the federal level in multiple cases, including North American Foreign Trading Corp. v. Mitsui,6 where the court expounded that under New York law, waiver cannot be used to extend an insured\u2019s coverage or narrow a policy\u2019s exclusions beyond that for which the insured originally bargained. Perhaps more generally the Southern District asserted\u00a0the doctrine of waiver is inapplicable where the defense raised by an insurer is existence or nonexistence of coverage.7<\/p>\n

As a point of clarification this standard does not apply to liability claims where the defense of waiver can and does apply. In a liability claim in New York a notice of disclaimer \u201cmust promptly apprise the claimant with a high degree of specificity of the grounds under which the disclaimer is predicated.\u201d8 In liability actions if the carrier doesn\u2019t specify the grounds for disclaimer the exclusion can be waived.<\/p>\n

Ultimately, when dealing with first party property disputes in New York it is essential to look to the insurance policy itself when analyzing a case in terms of coverage or lack thereof. The fact that a carrier did not specify an exclusion or lack of coverage in its disclaimer will not negate either the disclaimer or lack of coverage being raised by the carrier.<\/p>\n

1 W.C. Crais III., Annotation, Comment Note: Doctrine of estoppel or waiver as available to bring within coverage of insurance policy risks not covered by its terms or expressly excluded therefrom, 1 A.L.R. 3d 1139 (Originally Published 1965).<\/p>\n

2 Perras Excavating Inc. v. Transportation Insurance Company, 737 N.Y.S. 2d 692 (3rd Dep\u2019t 2002).<\/p>\n

3 Id.<\/p>\n

4 Schiff Associates, Inc. v Flack, 51 NY 2d 692 (N.Y. App. 1980).<\/p>\n

5 Id. (emphasis added).<\/p>\n

6 North American Foreign Trading Corp. v. Mitsui Sumitomo Ins. USA, Inc., 499 F. Supp. 2d 361 (S.D. N.Y. 2007) (applying New York Law).<\/p>\n

7 Steadfast Ins.Co. v. Stroock & Stroock & Lavan LLP, 277 F. Supp. 2d 245 (S.D.N.Y. 2003) (Applying New York law; See also, Nicoletta v. Berkshire Life Ins. Co., 99 A.D. 3d 567, 952 N.Y.S.2d 532 (1st Dep\u2019t 2012).<\/p>\n

8 General Acc. Ins. Grp. V. Cirucci, 46 NY 2d 862, 864 (1979); See, Adames v. Nationwide Mut. Fire Ins. Co. of New York, 55 AD 3d 513 (2nd Dep’t 2008).<\/p>\n

via Can an Insurer Raise an Exclusion After the Denial Letter? : Property Insurance Coverage Law Blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Christopher Nahas – November 27, 2013 Is an Insurer\u2019s right to raise a policy exclusion waived when it fails to identify the exclusion in its denial letter or disclaimer? Not in New York. In fact, this is the case in most jurisdictions. Generally, the doctrines of waiver and estoppel are not applicable in the context… Continue reading Can an Insurer Raise an Exclusion After the Denial Letter?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[3,470,469],"class_list":["post-2375","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-insurance-claims","tag-insurance-law","tag-policy-exclusion","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nCan an Insurer Raise an Exclusion After the Denial Letter? - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/can-insurer-raise-exclusion-denial-letter\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can an Insurer Raise an Exclusion After the Denial Letter? - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Christopher Nahas – November 27, 2013 Is an Insurer\u2019s right to raise a policy exclusion waived when it fails to identify the exclusion in its denial letter or disclaimer? 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