Today’s New York Times has an instructive tale in insurance coverage in a high-profile U.S. Supreme Court case. There, Harvard University is embroiled in expensive and protracted litigation over its affirmative action policies.
For such litigation, it had an initial $2.5 million deductible under its primary carrier, and then $25 million in primary coverage. It however, failed to notify its “excess coverage” carrier, which provided an additional $15 million in coverage. Because the litigation lasted so long and cost so much, that failure to timely notify the carrier — a policy requisite — it may have deprived itself of that needed $15 million in coverage.
The lesson, as quoted in the article, is, as to coverage: “you’ve got to provide notice early and often.” Our position is: “When in doubt, notify.” (Clients are rightly concerned that notice causes increased rates and/or cancelation. Our experience is different: If you are an overall responsible insured, even with occasional claims, even meritorious claims, it should not impact rates or coverages, or if so not greatly.)
The matter is pending in court, and in the hallowed halls at Harvard the question of whether someone is going to lose their job is open as well.
Our favorite Courts reporter — really focused on the US Supreme Court — Alan Liptak, brings us this report.
