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Martin and Elworth Defeat Insurance Company's $2.7M Contract Action Against Insurance Agency Client

The insurance carrier claimed they lost their Late Notice defense in a declaratory judgment action against their insured because the agent had knowledge of the insured’s claim and failed to timely report it to the carrier.  The carrier was found to owe defense and indemnification.  The agent denied it had any such knowledge and claimed that the carrier owed coverage under the policy and carrier could prove no prejudice from late notice. 

 The three-member AAA panel heard live witnesses, ordered extensive briefing and conducted post-hearing oral arguments.  On October 31, 2014, the panel issued its written decision finding that the breach of contract action was brought beyond the statute of limitations and, while the express indemnity claim was timely, the carrier failed to prove how the underlying case would have turned out differently had the agent provided the carrier with earlier notice.


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