In Rapid Park Indus. v. Great Northern Ins. Co., 2012 WL 5458023 (2d Cir. November 9, 2012), the Second Circuit Court of Appeals affirmed a Summary Judgment in an appeal from the Southern District of New York (Rakoff, J.).
In many cases, First-Party Insurance Companies are sued for Bad Faith for failing to investigate the claim. In this case, two "business interruption insurance" companies were accused of affording Coverage by Estoppel because they allegedly took too long to investigate the claim and to thereafter affirm or deny Coverage.
The Second Circuit summarized the record in this case in affirming that there was no Coverage by Estoppel on the record or under New York law here. The Second Circuit's final observation was this: "Finally, plaintiffs' own insurance expert acknowledged that defendants needed to make an inspection of the garage before determining coverage." Rapid Park Indus. v. Great Northern Ins. Co., 2012 WL 5458023 *2 (2d Cir. November 9, 2012).
This is a case in which an investigation was done by the Insurance Companies, the Insurance Companies' investigation confirmed the absence of Coverage, and the Courts upheld a Summary Judgment in the "business interruption" Insurance Companies' favor including on the Plaintiffs'-Policyholders' contention of Coverage by Estoppel.
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