Proof of Mailing Sufficient to Effect Cancellation: Court Trusts the United States Postal Service.

• Author: Zalma, Barry
• Position: ON MY RADAR

For an insurance contract to exist consideration--premium--must be paid. When an insured fails to pay the premium as required by the policy the insurer had the unquestioned right to cancel the policy it had issued.

State legislatures, like that of the state of New York, attempt to protect people insured from cancellation of insurance policies by insurers for no reason or claims of cancellation only after a loss by requiring a mailing to the insured and proof that the notice of cancellation was mailed to the insured. Invariably, the insured finding he, she or it no longer has insurance, will claim that the notice of cancellation was not received. The burden falls on the insurer to prove it gave proper notice.

In In the Matter of the Claim Of Yerly Osorio v. M & L Express, Inc., and Continental Indemnity Company, c/o Applied Risk Services, Workers' Compensation Board, 524441, 2017 NY Slip Op 07667, Appellate Division of the Supreme Court of the State of New York (November 2, 2017) the insured's policy was canceled for non payment of premium and the insured claimed it was entitled to coverage because the notice was not received.

The insured was found to have coverage and the insurer and employer appealed from the decision of the Workers' Compensation Board which ruled that the employer's workers' compensation carrier was responsible for claimant's claim.

FACTS

Claimant Osorio filed a claim for workers' compensation benefits based on allegations that he injured his head, neck and back in a work accident in July 2014. In its report of the accident, the employer acknowledged that the injuries were work-related. A hearing was held on the issue of whether the employer's one-time workers' compensation carrier had effectively canceled the employer's policy and complied with the notice requirements of Workers' Compensation Law. A Workers' Compensation Law Judge determined that the carrier remained liable for claimant's claim because it had not properly canceled the employer's policy. The Workers' Compensation Board affirmed finding that the carrier had produced insufficient proof to establish a nexus between its cancellation notice and its proof of mailing.

ANALYSIS

The state of New York requires that the statutory elements of cancellation of a workers' compensation insurance coverage must be strictly observed. Pursuant to Workers' Compensation Law "[w]hen cancellation is due to nonpayment of premiums and assessments, such cancellation shall not be...