Article
| March 24, 2010
Prejudice, Smejudice: Late Notice in the Face of a Condition Precedent
A version of this article was published as an Expert Commentary on IRMI.com, the website of the International Risk Management Institute, Inc., March 2010.
Reinsurers know that raising the defense of late notice to a late-noticed claim from a reinsured is very difficult to sustain (see Expert Commentary June 2005 and September 2002). Most states’ laws require the reinsurer to show actual prejudice to sustain the defense and avoid the late-noticed claim. Yet, the defense may be sustained based on the terms and conditions of the reinsurance contract. The language used in the notice provision of the reinsurance contract may impact how a court will interpret the clause. If the court interprets the notice clause as a condition precedent, a showing of prejudice by the reinsurer may not be required.
About the authors
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
For further information on Dewey & LeBoeuf, please visit www.dl.com. +1 888 532 6383