In a twist on the trend toward mandatory disclosure of money involved in litigation, New York is now requiring defendants to give plaintiffs with personal injury claims broad information about the defendant’s insurance coverage.
On December 31, 2021, Governor Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act, which modifies the local civil procedure rules with immediate effect to require defendants—including third-party defendants and defendants on cross- and counterclaims—in pending and future New York state court suits to provide insurance information to the plaintiff within 60 days of filing an answer.
The compulsory disclosures include: a complete copy of any insurance policy that may apply to satisfy a judgment in the case; the insurance applications; contact information for insurance adjusters; the amounts available under the policies to satisfy a judgment; and information about other lawsuits or attorneys’ fees that have depleted or may deplete the coverage amount. Defendants and their attorneys must both certify that the information is correct and complete, and defendants are responsible for keeping the information up to date. Notably, the requirements apply only to policies sold or delivered within New York state, and the Act is silent on the penalty for failure to comply with the requirements.
Insurers should prepare for requests about coverage limits and questions about releasing proprietary and confidential information. Critics view the mandatory disclosures as unnecessary—as relevant insurance information is customarily produced in discovery—and worry the law will cause inflated demands based on policy caps and arm plaintiffs with irrelevant, damaging, or prejudicial information.
The governor is reportedly considering changes to the law, including extending the deadline for production to 90 days after the answer, eliminating the disclosure of policy applications and requiring only information about policies that relate to the claim being litigated. Any changes would have to be approved by the legislature.
It will be interesting to see how the situation develops inNew York. If you’re a plaintiffs’ lawyer looking for solutions to fund your cases against defendants and their insurers, check out what LevelEsq has to offer at levelesq.com.