Hunton Insurance Recovery Blog

Most insurance policies seek notice from the insured “as soon as practicable.” In certain jurisdictions, an insurance company cannot void coverage by arguing that the insured’s notice was somehow “late” unless the insurer can show that it has been prejudiced. This is referred to as the “notice-prejudice” rule. Because insurance is a state-law issue, the law on this issue varies from state to state.

Insurance policies typically require a policyholder to provide notice to the insurer. And the notice requirements can vary between policies. That is why the language of the notice provision can be critical to interpreting its requirements. But the language is not always clear. In a recent article published by Mealey’s Insurance, Hunton attorneys Syed Ahmad and Yosef Itkin examine this type of scenario where a court determined that the language of a policy’s notice requirement was indeed ambiguous and construed it in favor of the policyholder, finding that the notice requirement was satisfied.

In a ruling earlier this month, an Eleventh Circuit Court of Appeals judge ruled in Scott, Blane, and Darren Recovery L.L.C., Anova Foods Inc. v. Auto-Owners Insurance Co., No. 17-12945-E, 2018 WL 1611256 (11th Cir. 2018), that an insurer did not have a duty to defend and indemnify its insured in a false marketing suit. Anova Food Inc. was sued by its competitor, King Tuna, for allegedly falsely asserting in its advertising that it treated tuna meat with a smoking process using filtered wood chips. King Tuna claimed that, in reality, Anova treated its tuna with synthetic carbon monoxide. In finding that King Tuna’s lawsuit did not trigger Auto-Owner’s duty to defend, the court held (1) that the lawsuit did allege a covered “advertising injury”; (2) that coverage was excluded under the policy’s “failure to conform” exclusion; and (3) coverage was barred by Anova’s untimely notice of the lawsuit.

In an article published in Law360, Hunton & Williams LLP partners Walter Andrews, Malcolm Weiss, and Paul Moura discuss two recent decisions in Tree Top Inc. v. Starr Indem. & Liab. Co., No. 1:15-CV-03155-SMJ, 2017 WL 5664718 (E.D. Wash. Nov. 21, 2017).  There, the Eastern District of Washington rejected an insurer's attempt to escape insurance coverage for a Proposition 65 lawsuit filed against juice-maker Tree Top Inc.

In Centurion Med. Liab. Protective Risk Retention Grp., Inc. v. Gonzalez, No. CV 17-01581 RGK (JCx), 2017 BL 392431 (C.D. Cal. Nov. 1, 2017), Centurion Medical Liability Protective Risk Retention Group sought a declaration that it owed no duty to defend a lawsuit alleging that its insureds—a group of medical practitioners—committed professional negligence during the delivery of a newborn child.  Centurion argued that it had no defense obligation because its insureds did not notify Centurion of the lawsuit within 20 days after it was filed, as required under the policy.