{"id":898355,"date":"2021-01-06T15:26:36","date_gmt":"2021-01-06T22:26:36","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898355"},"modified":"2021-01-06T15:26:59","modified_gmt":"2021-01-06T22:26:59","slug":"professional-claim-insurance-denial","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/professional-claim-insurance-denial\/","title":{"rendered":"Insured Failed to Timely Report Grievance Letter as \u2018Professional Claim,\u2019 But Insurer\u2019s Late Notice Denial Waived By Seven-Month Delay"},"content":{"rendered":"\n<p>Elizabeth Jewell | <a href=\"https:\/\/www.executivesummaryblog.com\/2020\/12\/insured-failed-to-timely-report-grievance-letter-as-professional-claim-but-insurers-late-notice-denial-waived-by-seven-month-delay\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Wiley Rein<\/a><\/p>\n\n\n\n<p>The United States District Court for the Southern District of New York, applying New York law, has concluded that, even though a grievance letter to an insured constituted a \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/successful-assertion-professional-liability-claim\/\" target=\"_blank\" rel=\"noreferrer noopener\">Professional Claim<\/a>\u201d that was not timely reported, the insurer waived its <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/known-loss-coverage\/\">late notice coverage defense<\/a> by waiting seven months to deny coverage.\u00a0<em>Hunt Constr. Group, Inc. v. Berkley Assurance Co.<\/em>, 2020 WL 7046842 (S.D.N.Y. Nov. 30, 2020).<\/p>\n\n\n\n<p>An insured general contractor sought coverage for a lawsuit under a claims-made policy in place for the June 15, 2018 to June 15, 2019 Policy Period (the \u201c2018 Policy\u201d). The lawsuit alleged negligence in connection with the oversight of a construction project. The insured included in the notice a grievance letter regarding the same project, which the insured had received during an earlier policy year (the \u201c2016 Policy\u201d).<\/p>\n\n\n\n<p>The 2018 Policy required that notice of a claim be provided in writing \u201cas soon as reasonably possible, which must be during the Policy Period.\u201d Moreover, the 2018 Policy provided that multiple claims \u201carising out of one or more acts, errors, omissions, incidents, events . . . or a series thereof, that are related (either causally or logically), will be considered a single Claim.\u201d<\/p>\n\n\n\n<p>The insurer initially agreed to defend the lawsuit pursuant to a general reservation of rights. Seven months after agreeing to defend, the insurer denied coverage and withdrew the defense on the basis that the lawsuit constituted a \u201cProfessional Claim\u201d first made during the 2016 Policy when the insured had received the grievance letter, which was not timely reported to the insurer. Coverage litigation followed.<\/p>\n\n\n\n<p>In the coverage suit, the court agreed with the insurer that the lawsuit was a \u201cProfessional Claim\u201d first made when the insured received the grievance letter demanding corrective action. In reaching this conclusion, the court rejected the insured\u2019s argument that the subsequent lawsuit constituted a separate \u201cProfessional Claim\u201d from the grievance letter under the policy\u2019s related-claims provision because the lawsuit alleged additional conduct post-dating the grievance letter.<\/p>\n\n\n\n<p>Despite concluding that the insured did not provide timely notice of the lawsuit, the court held that the insurer had waived the right to deny coverage based on late notice because it waited seven months after having constructive knowledge of the late notice defense before issuing a denial. The Court noted that the insurer could not rely on \u201cboilerplate language\u201d in its initial reservation of rights letter and that it should have expressly raised late notice as a defense and its failure to do so constituted a waiver.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Elizabeth Jewell | Wiley Rein The United States District Court for the Southern District of New York, applying New York law, has concluded that, even though a grievance letter to an insured constituted a \u201cProfessional Claim\u201d that was not timely reported, the insurer waived its late notice coverage defense by waiting seven months to deny&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/professional-claim-insurance-denial\/\">Continue reading <span class=\"screen-reader-text\">Insured Failed to Timely Report Grievance Letter as \u2018Professional Claim,\u2019 But Insurer\u2019s Late Notice Denial Waived By Seven-Month Delay<\/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":[9914],"tags":[9895,23,11389,11388],"class_list":["post-898355","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-insurance-coverage","tag-late-notice-coverage-defense","tag-professional-claim","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Insured Failed to Timely Report Grievance Letter as \u2018Professional Claim,\u2019 But Insurer\u2019s Late Notice Denial Waived By Seven-Month Delay - Advise &amp; 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