March 04, 2015 Practice Points

Notice-Prejudice Rule Inapplicable If Date-Certain Notice Required

The Supreme Court of Colorado held that the rule does not apply to a date-certain notice requirement in a claims-made insurance policy

by Paul T. Curley

On February 17, 2015, the Supreme Court of Colorado held that the notice-prejudice rule does not apply to a date-certain notice requirement in a claims-made insurance policy. InCraft v. Philadelphia Indemnity Insurance Company, 2015 CO 11, 2015 WL 658785, the court reasoned, in this case of first impression, that "[i]n a claims-made policy, the date-certain notice requirement defines the scope of coverage. Thus, to excuse late notice in violation of such a requirement would rewrite a fundamental term of the insurance contract."

The D&O policy at issue in Craft required the insureds to give notice of a claim "as soon as practicable" but "not later than 60 days" after the expiration of the policy. Near the end of the policy period, a company officer was sued for alleged misrepresentations he made during a merger. Unaware of the insurance policy, the officer defended himself against the suit. When he learned of the policy, approximately 16 months after the policy period had expired, he gave notice to the insurer, which declined coverage for the suit.

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