On August 29, 2019, the California Supreme Court issued a decision on an issue critical in many insurance coverage disputes. In Pitzer College v. Indian Harbor Insurance Co., 2019 DJDAR 8347 (Cal. 2019), the Court addressed the importance of California’s so-called “notice-prejudice” rule.  Under this rule, as the Court explained, an insurer must prove that “the insured’s late notice of a claim has substantially prejudiced its ability to investigate and negotiate payment for the insured’s claim. A finding of substantial prejudice will generally excuse the insurer from its contractual obligations under the insurance policy, unless the insurer had actual or constructive knowledge of the claim.” As the Court emphasized, “‘California law is settled that a defense based on an insured’s failure to give timely notice requires the insurer to prove that it suffered substantial prejudice. The insurer must show actual prejudice, not the mere possibility of prejudice’” (citations omitted).  Continue reading full article at pdf below.

190830 LADJ-Landmark Decision (KAP) (003)