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Company News
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New York Governor Patterson Signs Law Reversing New York's
Edwards Angell reports that Gov. Paterson has signed the "late notice" prejudice law and it is now effective. This is a big change in New York law and we can expect that there will be litigation very soon to help resolve the question of what qualifies as "material" prejudice such that it would allow an insurer to deny coverage for a claim. This has been a very common and almost unchallengeable standard that benefitted insurers. This is a vary favorable change for insureds. This change can lead to expected and unexpected coverage battles, i.e., if the claim is not timely reported then the choice of counsel, especially when there is a panel requirement, could lead to a dispute if the unapproved defense counsel gets heavily involved in defending the matter, or whether the insurer will be able to say that defense costs incurred prior to reporting are not going to be covered. Insurers will not be able to simply rely on "late notice" reporting as a defense to coverage. Claims costs probably will increase which might mean increased premiums.
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