1) Late Notice (part two): False Claims Act (FCA) / Whistleblower Insurance Coverage
Today, managing partner Brian Friel continues his series: The Ten Biggest Mistakes Made By Corporate Insurance Policyholders. In this video, Brian continues with examples about why late notice can be a vexing problem for corporate policyholders. As discussed in Part 1: Late Notice, providing proper notice can be one of the most complex insurance issues that corporate policyholder’s face.
The Late Notice Trap
In today’s post, Brian give two examples of what he calls the “notice trap,” where insurers rely on highly technical language in their policies and aggressive arguments to deny insurance claims.
False Claims Act (FCA) / Whistleblower Insurance Coverage
In the first example, we address the unique challenges faced with False Claims Act (FCA) Whistleblower actions. Procedurally, these kinds of claims present notice challenges because, when the files a legal complaint against a company, it is done in secret. Corporations are typically unaware that a complaint has even been filed, since the Government’s complaint is initially filed under seal. Thus, corporate policyholders may not even be aware that the case is being pursued. Then, when a corporate policyholder later becomes aware of the lawsuit, insurance companies frequently argue that it is too late to pursue coverage, because notice was not provided when the initial complaint was filed under seal.
Default Judgment Late Notice
In the second example, Brian explains how an inaccurate legal filing by a tort plaintiff resulting in the entry of a default judgment can put insurance coverage in jeopardy.
These examples seem frustrating and nonsensical, because they are, but they highlight the complexity of notice and the importance of understanding insurance policies and insurance companies when pursuing insurance claims.