Hunton Insurance Recovery Blog

California’s highest court held yesterday in Pitzer College v. Indian Harbor Insurance Co., that the state’s insurance notice-prejudice rule is a “fundamental public policy” for the purpose of choice of law analyses. This unanimous ruling, issued in response to certified questions from the Ninth Circuit, confirms and emphasizes California’s common law rule that policyholders who provide “late notice” may proceed with their insurance claim, absent a showing by the insurer of substantial prejudice. The California Supreme Court also extended the prejudice ...

A federal court last month turned away an insurer’s legal arguments seeking to avoid financial institution bond coverage for a bank’s losses resulting from a borrower’s use of forged documents to obtain a $3.6 million loan.  In doing so, the Arizona court rejected Everest National Insurance Company’s narrow construction of the bond’s “Securities” insuring agreement and ruled that the notice-prejudice rule applies to a financial institution bond.