Jeffrey L. Kingsley, a partner in Goldberg Segalla’s Global Insurance Services Practice Group, was interviewed by Law360 on a recent New York Court of Appeals ruling that punished a large insurer for violating its duty to defend. The court held that the insurer could no longer rely on policy exclusions to avoid covering an underlying judgment.
Commenting on the impact of the decision, Jeff noted that it clears up lingering uncertainty in New York law and provides a cautionary tale for insurers. It will encourage insurers to provisionally defend their policyholders when there’s a close call on coverage and then bring a declaratory action in court to determine their true obligations, he told Law360.
“It demonstrates the risks associated with a carrier disclaiming coverage,” he said. “If you on the front end, fail your duty to defend, on the back end, you’re limited only to the disclaimer.”