One of the frequently recurring D&O insurance coverage issues is the question of whether or not the policyholder provided its insurer with timely notice of claim as required under the policy. This past week several readers sent me a copy of a recent decision in which a federal court denied coverage under a homeowners’ association’s D&O insurance policy because of the association’s untimely notice of claim. In light of the policy language involved, the facts at issue, and the court’s analysis, the court’s decision arguably is unremarkable. However, I found that after I read the decision, I couldn’t stop thinking about what the coverage denial meant for the homeowners’ association and its members. This in turn caused me to reflect upon the problems with late notice coverage disputes in general. After a brief discussion of the recent decision, I have set out below my thoughts about notice defenses.
The decision that triggered these thoughts was Central District of California Judge Jesus G. Bernal’s January 7, 2016 ruling in the coverage action brought by The Citrus Course Homeowners Association (HOA) against its D&O insurer. A copy of Judge Bernal’s decision can be found here.
Continue Reading D&O Insurance: Meditations on Late Notice