Late Notice – Insurer Must Be Prejudiced In CO

Late Notice – Insurer Must Be Prejudiced In CO:   Late notice does not bar coverage in Colorado, even when a policyholder settles a case in violation of a no settlement clause before giving notice, if the insurer is not prejudiced. (CO, St.)

A Colorado state appeals court holds that even if a policyholder fails to give notice of a construction accident and settles the claim before advising its insurer, the claim will still be covered if the insurer wasn’t prejudiced.  There is a presumption in Colorado that late notice is prejudicial to the insurer, but it can be rebutted by the policyholder.  The court extended the same approach to claims involving violation of a “no settlement” clause in the policy.  Stresscon v. Travelers Nos., Case Nos.11CA1239 and 11CA1582, WL 4874352CO Ct. App., 9/12/13.

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