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Insurer needs notice of claim to defend it

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An insurer can't defend a claim of which it has no knowledge and its duty to defend doesn't begin until it receives basic notice information to allow it to defend a claim, ruled the Indiana Supreme Court. The high court affirmed today summary judgment in favor of an insurer on the question of when its duty to defend began in an environmental claim filed by a policy holder because the duty to defend didn't begin until the policy holder complied with the policy's notice requirement.

The question in Dreaded Inc. v. St. Paul Guardian Insurance Co., et al., No. 49S02-0805-CV-244, is whether St. Paul Guardian Insurance was liable for environmental damage claims against Dreaded Inc. that it was unaware of for more than three years. Dreaded received notice from the Indiana Department of Environmental Management requiring it to investigate contamination at a former business site. Dreaded notified St. Paul of the IDEM claim 3 ½ years later and asked St. Paul to take up its defense and reimburse the company for defense costs incurred up to that point. St. Paul agreed to defend Dreaded beginning at the point it received notice, but not for the 3 ½ years prior to receiving notice. Dreaded filed suit seeking declaratory relief establishing St. Paul's duty to fully defend and indemnify against the IDEM action and damages from the breach of contract of St. Paul's duty to defend. St. Paul countered it required prompt notice of damage claims and it wasn't liable for payments made without its consent. The Indiana Court of Appeals reversed summary judgment in favor of St. Paul.

Dreaded argued on appeal it's entitled to recover its pre-notice defense costs unless St. Paul can prove it was prejudiced by the company's late notice and St. Paul failed to present evidence showing actual prejudice. However, the facts of this case will result in the same outcome regardless of whether St. Paul has to show it was prejudiced, wrote Justice Brent Dickson. Dreaded's claim for damages is predicated solely on its contention St. Paul breached its duty to defend them against a claim or suit for injury or damage covered by their policy.

But an insurer can't defend a claim if it doesn't know about, and until it receives the basic information needed to allow it to defend a claim, the insurer can't be held accountable for breaching this duty, wrote the justice. St. Paul's duty to defend didn't arise until Dreaded complied with the policy's notice requirement, so the insurer is entitled to summary judgment as a matter of law.

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  1. Major social engineering imposed by judicial order well in advance of democratic change, has been the story of the whole post ww2 period. Contraception, desegregation, abortion, gay marriage: all rammed down the throats of Americans who didn't vote to change existing laws on any such thing, by the unelected lifetime tenure Supreme court heirarchs. Maybe people came to accept those things once imposed upon them, but, that's accommodation not acceptance; and surely not democracy. So let's quit lying to the kids telling them this is a democracy. Some sort of oligarchy, but no democracy that's for sure, and it never was. A bourgeois republic from day one.

  2. JD Massur, yes, brings to mind a similar stand at a Texas Mission in 1836. Or Vladivostok in 1918. As you seemingly gloat, to the victors go the spoils ... let the looting begin, right?

  3. I always wondered why high fence deer hunting was frowned upon? I guess you need to keep the population steady. If you don't, no one can enjoy hunting! Thanks for the post! Fence

  4. Whether you support "gay marriage" or not is not the issue. The issue is whether the SCOTUS can extract from an unmentionable somewhere the notion that the Constitution forbids government "interference" in the "right" to marry. Just imagine time-traveling to Philadelphia in 1787. Ask James Madison if the document he and his fellows just wrote allowed him- or forbade government to "interfere" with- his "right" to marry George Washington? He would have immediately- and justly- summoned the Sergeant-at-Arms to throw your sorry self out into the street. Far from being a day of liberation, this is a day of capitulation by the Rule of Law to the Rule of What's Happening Now.

  5. With today's ruling, AG Zoeller's arguments in the cases of Obamacare and Same-sex Marriage can be relegated to the ash heap of history. 0-fer

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