Plaintiffs' and defense attorneys struggle with the lack of defined time limits as applied to Insurance Law sec. 3420(d). Section 3420 is the requirement in bodily injury and death cases that an insurer shall give an insured, injured person, or any other claimant written notice of a disclaimer or denial of coverage as soon as is reasonably practicable of the disclaimer of liability or denial of coverage .
In prior cases, the New York Court of Appeals has refused to set a bright-line deadline as it applies to sec. 3420(d). What happens when the insurer is faced with an insured who is not cooperating in the defense of an action? The lack of cooperation standard that an insurer must demonstrate is extremely high. As such, a lot of time can pass before an insurer has enough evidence to demonstrate lack of cooperation.
The Court addressed that exact issue in Continental Cas. Ins. v. Stratford. The case stemmed from a dental malpractice actions commenced against the insured Stratford. The insured over a six-year period cooperated with his insurer only sporadically. The Court held that there were issues of fact regarding the amount of time required for Stratford's insurer to evaluate his cooperation (or lack thereof) with the insurer.
A possibility exists that the reasoning in this decision applies beyond the non-cooperation context. An insurer who can demonstrate a valid excuse for a disclaimer beyond the "industry-standard" 30-day time limitation can rely on this decision as additional support that the time limit is an elastic concept.
New York Civil Law 