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New York s Second Department Splits From First Department - Insurance

New York s Second Department Splits From First Department - Insurance
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New York Court Rules Duty to Defend Policies Must Explicitly Provide for Recoupment of Defense Costs | Robinson+Cole Property Insurance Coverage Insights

In the underlying personal injury action, commenced in January 2011, Victor Gecaj sought to recover damages for injuries he allegedly sustained when he fell from a ladder at a property owned and operated by the insureds. The insureds failed to notify its insurance company about Gecaj’s accident until October 2014 more than four years after the incident, and after an inquest on damages had occurred, and judgment had been rendered against the insureds in the sum of $900,000. The insurance company denied coverage based on late notice. However, the default judgment was then vacated, and the insurance company agreed to provide a defense under a reservation of rights to deny coverage if the default judgment was later reinstated. When the default judgment was reinstated, the insurance company advised the insureds and Gecaj that it was denying coverage, and reserving its right to recover any fees and costs incurred in defending the insureds in the underlying action. The insurance company t

NY Rules Duty to Defend Policies Provide for Recoupment of Defense Costs

Tuesday, February 9, 2021 The Second Department, Appellate Division, for the Supreme Court of New York, recently held in a matter of first impression, that an insurance company with a duty to defend may not recover defense costs after a determination that no duty to indemnify or further defend exists even though the insurer expressly reserved its right to recoup such defense costs unless the policy explicitly provides for such recovery.  See In the underlying personal injury action, commenced in January 2011, Victor Gecaj sought to recover damages for injuries he allegedly sustained when he fell from a ladder at a property owned and operated by the insureds. The insureds failed to notify its insurance company about Gecaj’s accident until October 2014 more than four years after the incident, and after an inquest on damages had occurred, and judgment had been rendered against the insureds in the sum of $900,000. The insurance company denied coverage based on late notice

Outlier Decision of New York Appellate Court Denies Insurer s Right to Recoup Defense Costs Even Though Court Found No Duty to Indemnify | Carlton Fields

To embed, copy and paste the code into your website or blog: Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue provided for a duty to defend but did not contain an express contractual provision allowing for the recoupment of such defense costs. This decision, however, by a court for one of four judicial departments in New York, is contrary to other state and federal decisions allowing recoupment under New York law and should be limited to its facts.

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