“Know the Gaps” – Farmer’s Insurance ad. The Colorado Supreme Court granted review of, and answered in the negative the following certified question from the Tenth Circuit Court of Appeals: “whether the notice-prejudice rule applies to the date-certain notice requirement of claims-made policies.” The notice-prejudice rule (set forth in Friedland v Travelers) allows insureds to avoid the consequence of late notice of a claim under a “prompt-notice” provision if the insurer is not prejudiced. A “claims-made” policy, different from an “occurrence” policy, typically requires that notice of an occurrence be given by a date-certain as a condition precedent to coverage. The date-certain provision is, therefore, a material condition of coverage. Applying the notice-prejudice rule would alter the parties’ agreed allocation of risk, something the Court declined to do.
To read the 10th Circuit’s order following this opinion, click HERE.