Even when an insurer receives very belated notice of a suit against its insured, it can face harsh consequences if it does not take action to provide a defense.
Despite a policy limit of only $50,000 and notice of suit received by the insurer only after an entry of default against the insured in the underlying tort action, the Massachusetts Supreme Judicial Court (SJC) recently upheld a $3,574,357 judgment against an insurer for breaching its duty to defend.
In Boyle, a tire exploded inside a garage owned by C&N, severely injuring plaintiff. C&N notified its insurer of the accident, but did not notify the insurer when plaintiff later filed the lawsuit because C&N had ceased operations. Therefore, the insurer did not defend the underlying suit, the court entered a...
