Section 11.65 Notice of Loss

• Library: Insurance Practice 2015

Fidelity bonds commonly require that notice of loss be given to the surety within a specified time. Notice is not the same as the formal proof of loss—see §11.66, infra—and is required more promptly. Notice is usually required as a condition precedent and must be given within the time specified unless waived by the surety. New Amsterdam Cas. Co. v. Cent. Nat. Fire Ins. Co.,4 F.2d 203 (8^th Cir. 1925) (within 30 days after learning of any act that might be made the basis of any claim); McKee v. Am. Cas. Co. of Reading, Pa.,316 F.2d 428 (5^th Cir. 1963) (within 90 days after discovery of loss, and discovery of loss within 12 months after cancellation of bond); 13 George J. Couch, Couch on Insurance 3d § 186:12 (1998). But see Goffe v. National Surety Co.,9 S.W.2d 929 (Mo. 1928), in which the bond required notice within 3 months after expiration of the bond and also within 60 days after discovery of the loss, and the Court held that the plaintiff’s noncompliance with the former clause did not preclude recovery when the plaintiff gave notice immediately upon discovery of the defalcations.

Provisions for notice and proof of loss are to afford the surety an adequate and timely opportunity for investigation, to prevent fraud, and to enable the surety to make an intelligent evaluation of its rights and liabilities before being obligated to pay a loss. 13 Couch §§ 186:12, 186:14, 186:16.

If the bond does not...