Insurance carriers analyzing whether cooperation or notice clauses have been breached must conduct a detailed analysis of the particular requirements of the applicable jurisdiction to determine the rule and the exceptions. Photo: Andrey/Adobe Stock
Denying insurance coverage is a high-stakes decision with potentially significant consequences for insurers and policyholders. This decision demands an even greater degree of prudence if an insurer denies coverage due to a policyholder's breach of a condition precedent to coverage.
Although there are differences in the manner the courts treat occurrence-based and claims-made policies as well as various conditions precedent to coverage, when a policyholder fails to comply with a policy's condition precedent, courts will scrutinize various factors in determining whether a decision to deny coverage was justified. A showing of prejudice, whether by establishing a rebuttable presumption or through other means, is a necessary first step in most, but not all, jurisdictions.
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