The Pennsylvania Supreme Court Renders Important Decision Upholding Denial Of Coverage For Late Notice
The Philadelphia personal injury and insurance claim lawyers at Reiff & Bily call your attention to a recent ruling by the Supreme Court of Pennsylvania in Ace American Insurance Company v. Underwriters at Lloyds and Companies which upheld the importance of enforcing the plain and clear meaning of insurance contract language.
In the case at hand, Ace purchased a claims made and reported policy with Lloyds and the terms specifically stated that Ace must file a report or it must report a claim as soon as practicable and in no event no later than 90 days after the expiration date of the policy. The insurance company denied payment claiming that Ace failed to timely comply with the errors and omissions policy’s specific notice of claim requirements. Ace argued that the insurance company could not be denied a claim based upon late notice unless it could show harm or prejudice.
Claims made insurance policies provide an insurer a clear and certain cutoff date for coverage. In return, the insured typically pays a lower premium. Based on actual data, a claims made policy can be as much as 32% cheaper than an occurrence policy premium according to public records.