The Appellate Division recently issued a noteworthy unpublished decision that raises concerns for “claims made and reported” insurance policyholders. In Templo Fuente De Vida Corp. v. National Union Fire Insurance Company of Pittsburgh (N.J. App. Div. June 6, 2014), the court held that when a policyholder reports a claim late but during the policy period, the insurance company properly may deny the claim based on late notice without a showing of prejudice.
The decision comes as a surprise because the court followed seemingly inapposite precedent holding an insurance company need not show prejudice to deny coverage under a claims-made and reported policy when the claim is reported after expiration of the policy period. In doing so, the court rejected precedent holding that an insurance company must show prejudice to sustain its denial of coverage based on late notice under “occurrence” based insurance policies.
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