Insuralex´s exclusive member in California writes about the notice-prejudice rule.
By Andrew B. Downs
When it comes to insurance coverage, one cue to the court’s feelings about an issue is whether it views that issue as a “technicality.” When that happens, good things rarely result. Another cue is when the case turns on an esoteric legal issue of greater interest to academics than people living their daily lives. Pitzer College v. Indian Harbor Ins. Co.(August 29, 2019) combines both of those situations. The result was not good for the insurance industry.
Pitzer College is one of the Claremont Colleges in Southern California. Claremont bought a policy providing coverage for pollution remediation expenses. During the construction of a new dormitory, Pitzer discovered lead contamination on its property. It promptly began remediation activities. It didn’t notify its insurer until some months later after remediation was complete. The insurer denied the claim based on late notice and breach of the policy’s consent to incur expenses clause. The policy had a choice of law clause making New York law applicable to its interpretation and enforcement.