Insurer Required to Provide Coverage Because of Flaws in its Letter Disclaiming Coverage

On April 19, 2017, the Second Department issued a decision in Unified Window Systems, Inc. v. Endurance American Specialty Insurance Co., 2017 NY Slip Op. 03036, holding that an insurer had to provide coverage because of defects in its letter disclaiming coverage, explaining:

Endurance initially disclaimed coverage on the ground that the policy had been cancelled for nonpayment of premiums. The initial burden of demonstrating a valid cancellation of a policy is on the insurance company which disclaimed coverage. In support of their motion for summary judgment, the plaintiffs submitted evidence establishing, prima facie, that the notice of cancellation produced by Endurance did not comply with the terms of the insurance policy requiring that a notice of cancellation be mailed at least 15 days before the effective date of cancellation, and that the cancellation notice Endurance purportedly mailed to LIES failed to reference the pertinent subparagraph of Insurance Law § 3426(c)(1)(A), as required by Insurance Law § 3426(h).

In opposition to the motion, Endurance failed to raise a triable issue of fact. . . .

Endurance waived its right to disclaim coverage based upon the Employer's Liability and Designated Ongoing Operations exclusions because it failed to include these grounds for disclaimer in the original disclaimer letter. In any event, its disclaimer based on these exclusions was untimely as a matter of law.

(Internal quotations and citations omitted).