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Saturday, January 28, 2023

Harvard Learns Lesson About Timely Notice

While Harvard prepares to defend its admissions insurance policies to the Supreme Court, one among its insurers continues to argue {that a} technicality prevents Harvard from recovering $15 million to defray its protection prices beneath its insurance coverage insurance policies.

Last month, we mentioned an insurance coverage protection dispute between Harvard College and Zurich American Insurance Company. The dispute arises from Zurich’s refusal to cowl a 2014 lawsuit that an affirmative-action group filed in opposition to Harvard, alleging that the college’s admissions insurance policies violated Title VI of the Civil Rights Act. Since the affirmative motion swimsuit was filed, Harvard has been defending its admissions insurance policies by means of the trial and appellate courtroom techniques, an effort that has price the college greater than $25 million.

Zurich is refusing to offer Harvard the $15 million in extra insurance coverage protection it offered to the college for prices over and above the $25 million Harvard’s main insurer promised to pay. Harvard desires that $15 million to pay for its ongoing protection prices or to resolve the claims in opposition to it. But, after Harvard notified Zurich that its extra insurance coverage coverage was about to be on the hook, Zurich denied protection, claiming that Harvard’s failure to adjust to the surplus insurance coverage coverage’s discover necessities barred protection. In 2021, Harvard sued Zurich to recuperate the $15 million it’s owed beneath the surplus insurance coverage coverage.

In August, Zurich moved for abstract judgment, arguing that the difficulty is straightforward: No well timed discover, no protection.

More particularly, Zurich argues that Harvard missed the deadline to present discover by greater than a yr, and that mistake fully bars protection. The Zurich extra coverage is a “claims-made and reported coverage,” which means that it extends protection solely to claims each made in opposition to the policyholder (Harvard) and reported to the insurer (Zurich) throughout the time period of the coverage or inside a 90-day grace interval afterward. According to Zurich, the one reality the courtroom wants to think about is that Harvard missed the discover deadline.

Harvard, then again, argues that Zurich is being too literal, and is taking part in a “cat and mouse” sport to keep away from paying precisely what it promised when it offered Harvard the surplus insurance coverage coverage. According to Harvard, Zurich knew concerning the affirmative motion litigation regardless that Harvard had not formally given discover, wouldn’t have completed something otherwise if Harvard had given discover earlier, and shouldn’t be allowed to depend on a technicality to keep away from paying. In Harvard’s phrases, the “discover requirement will not be an escape hatch for insurance coverage firms to keep away from legal responsibility to policyholders resulting from technical noncompliance.”

Harvard’s argument is smart. Why ought to an insurance coverage firm that really is aware of what’s happening be permitted to benefit from a discover technicality? Unfortunately, the stark actuality is that many, if not most, courts will strictly implement discover necessities even the place the aim of the supply – informing the insurer concerning the declare – was met. So, Harvard’s dispute serves as a lesson to all policyholders: Don’t hit snooze in your discover obligation. Policyholders ought to fastidiously overview their insurance coverage insurance policies and provides well timed discover of any and all potential claims. Better to over notify their insurers than to get caught in a cat and mouse sport.

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