Notice to Insurance Agent Does Not Constitute Notice to Insurer

The United States District Court for the Southern District of Texas has held that notice of a potential claim provided to an insurance agent is not considered notice to an insurer for the purposes of determining when a claim is first reported.  Evanston Ins. Co. v. Cheetah, Inc., 2016 WL 4494440 (S.D. Tex. Aug. 26, 2016).

The insurer sought a declaration that it had no duty to defend or indemnify an insured on the grounds that the insured did not provide timely notice of an incident giving rise to a subsequent lawsuit.  The insurer argued that it first received notice after the end of the policy period corresponding to the date of the incident, and coverage was therefore barred under subsequent policies because the insured had knowledge “of the incident that gave rise to the Lawsuit prior to the inception” of those policies.  In response to the insurer’s motion for summary judgment, the insured offered evidence that it had provided notice of the incident to its insurance agent during the policy period.

The court granted the insurer’s motion for summary judgment, holding that coverage was barred because the insured had failed to provide timely notice.  The court held that notice to the insurance agent did not constitute notice to the insurer because it was “undisputed” that the insurance agent was the insured’s agent and not the insurer’s agent.  Moreover, the evidence established that the insured had knowledge of the incident in question but did not disclose that information to the insurer as required under the terms of the other policies, in contravention of the policy terms.