The Second Department, Appellate Division, for the Supreme Court of New York, recently held in a matter of first impression, that an insurance company with a duty to defend may not recover defense costs after a determination that no duty to indemnify or further defend exists—even though the insurer expressly reserved its right to recoup such defense costs—unless the policy explicitly provides for such recovery. See American W. Home Ins. Co. v. Gjonaj Realty & Mgt. Co., 2018-03435, 2020 WL 7767944 (2d Dept., Dec. 30, 2020).
Continue Reading New York Court Rules Duty to Defend Policies Must Explicitly Provide for Recoupment of Defense Costs
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Innocent or Unintentional Mistake in Application is Irrelevant: NY’s Second Department Finds Rescission Appropriate and Affirms Summary Judgment Based on Insurer’s Claim of Misrepresentation
By Guest Contributor on
Posted in Misrepresentation
When an insurer finds that the insured misrepresented a material fact in an application for insurance, the insurer may rescind the policy of insurance, and take the position that no coverage exists for a claimed loss. In a recent case analyzed by New York’s Second Department, Otsego Mutual rescinded its policy of insurance with the insured after a fire loss and after Otsego Mutual determined that the insured stated in the application for insurance that the property at issue was a two-family dwelling, when in fact it was a three-family home. Estate of Gen Yee Chu, et al. v. Otsego Mut. Fire Ins. Co., 2017 N.Y. App. Div. LEXIS 1516 (Mar. 1, 2017). Otsego Mutual established that it would not have issued the policy of insurance if it had known that the property was a three-family home. The insured testified that he believed that the house was a “legal two-family dwelling.”…
Continue Reading Innocent or Unintentional Mistake in Application is Irrelevant: NY’s Second Department Finds Rescission Appropriate and Affirms Summary Judgment Based on Insurer’s Claim of Misrepresentation