Don't Delay!

Submitted by patentadmin on Tue, 11/08/2011 - 19:21

Promptness is a trait valued by party planners looking for RSVPs - and it seems insurers value it pretty highly, too. Case in point: Rockland Exposition, Inc., v. Great American Assurance Co.

Rockland Exposition (REI) has a commercial general liability policy from Great American. In June of 2008, a company called the Association of Automobile Service Providers of New Jersey ("AASP") sued REI for trademark infringement because REI had "[created] a similar and therefore competing trade show, and [used] a name that is similar."

AASP faxed a copy of its complaint to REI on June 27, 2008 and formally served REI with papers on July 11 - but Great American didn't receive anything about the lawsuit in writing until October 1, 2008 - several weeks later. This delay, contended Great American, went against the policy, which required REI to notify Great American in writing "as soon as practicable" if a suit was brought against REI.

There were other issues at play in this lawsuit. For starters, REI claims that it notified its "insurance intermediary" (its broker) of the lawsuit on August 19, 2008. However, telling the the guy that sold you the policy about the lawsuit doesn't necessarily count as notifying the actual insurance company.

A second issue is that the policy doesn't actually even cover trademark infringement lawsuits - only trade dress and slogans. REI argued that AASP's claims could be construed as trade dress and slogan claims and should, therefore, be covered under the policy.

But simply because REI waited too long to notify Great American of the lawsuit, the Court didn't have to decide this tricky issue.

With regard to the policy's coverage, the judge wrote, "Because the Court finds that REI's claim fails due to its untimely notice, it need not decide whether the AASP suit would otherwise have been covered by the Policy." (You can almost hear a sigh of relief.)

REI argued that its late notice should be excused because it had a reasonable, "'good-faith belief in its non-liability'" for the claims asserted by AASP. But in this case, prompt action would have been better than mere belief.

The lesson to be learned: Make sure you know what's covered by your insurance policies - and whom to contact if you're sued.

Submitted by Anonymous (not verified) on Tue, 11/15/2011 - 08:26


I've found that, with anything regarding legal issues, it's best to take action immediately. It's a shame that REI had to learn this lesson the hard way.

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