On June 1, 2022, the United States District Court for the Eastern District of Louisiana reminded insureds of the importance of providing early notice to their insurers of claims that may trigger coverage.

In Nucor Steel Louisiana, LLC v. HDI Glob. Ins. Co., CV 21-1904, 2022 WL 1773866, at *1 (E.D. La. June 1, 2022), at issue was whether, under Louisiana law, an insurer of a commercial general liability policy (“CGL policy”) has a duty to reimburse its additional insured’s “pre-tender” defense costs when: (a) the insurer agreed to defend the additional insured under a reservation of rights; (b) the insurer did not expressly state in its communications to the additional insured that it would not reimburse the pre-tender defense costs; and (c) the insurer learned of a potential duty to defend its additional insured from a source other than the additional insured. The Court found that the insurer was not responsible for the additional insured’s “pre-tender” defense costs.

The ruling was significant for the parties, as the additional insured’s post-tender defense costs totaled $37,067.47, while its pre-tender defense costs totaled $135,950.75. Although it appears that there may have been additional arguments to be made by the insured which were not made, the ruling serves as a stark reminder to all insureds to provide prompt notice to their insurers of claims made against them – even if the claim has not yet resulted in a lawsuit, even if the insurer has already obtained notice by other means, and even if the claim has been tendered to an indemnitor.

Insurance coverage is a highly-specialized area of the law with many nuances, and you should not navigate those waters alone. If you need assistance in reporting claims, obtaining coverage opinions, analyzing reservation of rights letters, or challenging denials of coverage, Kean Miller’s Insurance Coverage and Recovery Team is here to help. Kean Miller protects our clients’ coverage positions prior to and during the claims process by reviewing insurance policies, negotiating coverage enhancements, satisfying policy notice requirements, complying with policy terms and conditions, and documenting claims – all important steps that can avoid loss or denial of coverage and maximize your chances of insurance recovery.