Generally, insurance policies include a requirement that the insured notify the insurance company of a claim “as soon as practicable. For many reasons, the insured may fail to do so. Sometimes, the insured wants to avoid an increase of premiums. At other times, the insured believes that the incident is not worth bothering the insurance company. And, at times, the insured does not know that it has coverage. For whatever reason, delay in notifying the insurance company can be hazardous to financial health.
RMG owns 61 restaurants. On September 20, 2007, an elderly gentleman trips after stepping in a hole at one of the restaurants, and the man is hospitalized. On that same day, the injured man’s wife calls the restaurant and informs the manager about the incident. RMG attempts to investigate the case internally in order to save money. In January, 2008, the injured man hires an attorney who sends a demand letter to RMG. RMG notifies the insurance company of the claim on February 22, 2008. Between September 20, 2007, and February 22, 2008, RMG repaired the parking lot.
Generally, timely notice means at the time of the incident. The fact that customers often trip and fall, but do not file lawsuits, does not excuse this notice requirement. In addition, the fact that the insured may be able to settle the case for less than the deductible does not excuse the notice requirement.
In Tennessee, even if notice of a claim is untimely, the insurance company does not automatically escape coverage; if there is no prejudice by virtue of the delay. In this case, the prejudice is obvious -- the scene of the accident was altered.
So, delay notice to the insurance company at your own risk. But, if notice is delayed, remember that delay does not always result in prejudice.
See Everest National Insurance Company v. Restaurant Management Group, LLC, No. E2010-01753-COA-R3-CV (Tenn. Ct. App. April 25, 2011).
No comments:
Post a Comment