ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, December 11, 2004

Cases—Notice—Insured fails to notify insurer on time, loses coverage

Texasflag_3 An insured who thought that a claim against it would be resolved within the policy’s self-insurance limits and therefore did not notify the carrier could not later claim reimbursement, according to a federal district court in Texas.

A trucking company had a policy with an insurance carrier under which the company was self-insured for the first $1 million and entitled to excess coverage beyond that. When a plaintiff sued the insured for $1 million, the insured did not notify the insurer. At trial, a jury awarded $1.1 million. At this point the trucking company notified the insurer.

Too late, wrote Judge Paul D. Stickney.  The trucking company argued that it had no obligation to notify the insurer because (1) it had no duty to settle within the self-insurance limits, and (2) the insurer was not entitled to notice until claims exceeded the self-insurance.  The court held that the policy required notice of all claims.

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Hey, this is a BS story! a corporate "money making scam" and nothing else! Why in a world would you report it?

Posted by: Rick Perez | Dec 14, 2004 12:10:58 AM

Sorry, I'm not sure what you mean.

Posted by: Frank Snyder | Dec 14, 2004 9:25:13 AM

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