Annual Survey of Developments in Insurance Coverage Law

Publication year2021
Connecticut Bar Journal
Volume 85.


Connecticut Bar Journal
Volume 85, No. 2, Pg. 121
June 2011


By Charles T. Lee and Mandiey L. Winalski (fn*)

This article examines recent developments in insurance coverage cases involving commercial property and casualty insurance policies; specifically, it identifies cases of interest that have been decided by the state and federal courts of Connecticut during 2010. While no new major doctrines were announced in the past year, several notable themes have continued to develop. In particular, this article examines developments and patterns regarding (1) timely commencement of suit; (2) issues arising from the Connecticut Unfair Insurance Practices Act ("CUIPA") and the Connecticut Unfair Trade Practices Act ("CUTPA"); and (3) the definition of an "occurrence" in the context of liability policies. Finally, the article discusses several rulings concerning other insurance coverage issues that will be of interest to the bar.

I. Timely Commencement Of Suit

Timeliness of commencement of suit against an insurance company can be a litigated issue in coverage cases. In its 1988 decision in Aetna Casualty and Surety Company v. Murphy,(fn1) the Connecticut Supreme Court established the rule that late notice of claim in violation of policy conditions may be excused if the policyholder can show that the insurance company suffered no material prejudice. However, this principle generally has not been extended to contractual periods in which suit must be brought against an insurance company. In Voris v. Middlesex Mutual Assurance Company,(fn2) the Court strictly enforced such a deadline in a consumer context, without regard to whether there was any prejudice to the insurance company. The insurance policy stated that written notice of intent to bring a suit for under-insured motorist benefits must be provided within three years of the date of the accident.(fn3) On May 11, 2004, the policyholders notified the carrier by telephone that an accident had occurred one day earlier.(fn4) They did not provide written notice of intent to sue, however, until six weeks after the three-year deadline, on June 22, 2007.(fn5) The insurance company denied coverage on the basis of breach of the policy condition.(fn6) The Court enforced the three-year time limit, explicitly rejecting the application of Aetna Casualty and Surety Company v. Murphy.(fn7)

The trial court in Antonacci v. Darwin Select Insurance Company(fn8) applied the rule of Aetna Casualty and Surety Co. v. Murphy in the context of a claims-made policy, where the claim was submitted within the policy period but after a pre-judgment remedy had been granted against the policyholder, some seven months after the complaint had been filed. The insurance company denied defense and indemnity on the basis of untimely notice because the policy required that the policyholder give notice of any claim "immediately."(fn9) At issue was whether prejudice was relevant in this situation.(fn10)

The trial court observed that, in Murphy, the Connecticut Supreme Court resolved this issue in the affirmative in a case in which the insured was covered by an occurrence-based policy and noted that the Court's concern there was "disproportionate forfeitures."(fn11) The Antonacci court noted that "an insured's right to coverage applies equally to a claims made policy, and that protection of the insured from such forfeitures does not run counter to the purposes served by such a policy, as long as notice is given within the policy period."(fn12) Accordingly, the court held that late notice within the policy period could be excused where the policyholder shows lack of prejudice to the insurance company.(fn13)

In Bacewicz v. NGM Insurance Company,(fn14) a federal district court declined to grant summary judgment to an insurance company on the basis of untimely commencement of suit in a property damage case involving cracks in a basement wall. The policy required that suit be brought "within one year after the date of loss."(fn15) Under the facts in Bacewicz, Judge Hall held that this limitation incorporated a discovery standard under which the one-year period begins to run only when a reasonable person would have learned of the injury or loss.(fn16) Compliance with the limitation period raised a question of fact as to when a reasonable person would have first known about the loss giving rise to the claim.(fn17)

Thus, while insurance companies often argue that the issue of timeliness is dispositive, and in some circumstances it may well be...

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