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Legal Updates for Insurance Agents & Brokers

Adequate Notice Requires More Than Delivery of a Policy

Legal Update for Insurance Agents & Brokers – February 2025

February 1, 2025

A December 31, 2024, decision from the Supreme Court of Idaho found that adequate notice to an insured required more than the delivery of a policy and, due to the insurer’s failure to do so, coverage under a pre-existing policy continued.

In BrunoBuilt, Inc. v. Auto-Owners Insurance Co., 2024 WL 5250025 (Idaho 2024), BrunoBuilt asserted claims against various parties following the reactivation of a landslide that damaged the Dempsey home. The Dempseys had entered into a construction contract with BrunoBuilt in 2014 for the construction of a residence on property located on a pre-existing landslide. 

BrunoBuilt had contracted with Randy Richardson of Richardson Insurance Services to advise on available insurance coverage and obtained a “Tailored Protection Policy,” which covered “direct physical loss or damage caused by a covered peril to ‘buildings or structures’ or while in the course of construction, erection or fabrication.” The Dempsey project was added to the policy in August of 2015. At that time, the policy contained a coverage exclusion for loss resulting from landslide. Prior to the renewal date in 2016, the agent sent an email to BrunoBuilt and, in reply, was informed that the Dempsey job would likely be done by the end of March. Therefore, the agent did not include the Dempsey property in the 2016 renewal, thereby revising the exclusion for damage resulting from landslides and providing that damage from both naturally-occurring landslides and those caused by human activity were excluded from coverage.

Damage to the Dempsey property from the landslide became noticeable between April and June of 2016. BrunoBuilt, with Richardson, filed a claim with Auto-Owners. Auto-Owners then informed BrunoBuilt that Randy Richardson deleted the Dempsey property from the renewal. BrunoBuilt claimed it was the first time they were informed that the property was not included in the 2016 renewal and requested that coverage be reinstated. Auto-Owners declined and closed BrunoBuilt’s claim. 

BrunoBuilt sued Richardson and Auto-Owners, asserting that Richardson was negligent and that Auto-Owners was liable for Richardson’s negligence based on the doctrine of respondeat superior. BrunoBuilt alleged Richardson was negligent in that he failed to properly advise them regarding the existence, cost, and need for landslide coverage and that he failed to include the Dempsey property in the 2016 renewal.

The court identified “the generally accepted legal principle that, if insurers fail to provide notice of a reduction in coverage upon renewal, then coverage under the pre-existing policy continues.” Thomas v. Nw. Nat’l Ins. Co., 292 Mont. 357, 973 P.2d 804, 807 (1998) (“[W]hen an insurer renews a previously issued policy, it has an affirmative duty to provide adequate notice to the insured of changes in coverage.”); D. C. Barrett, Annotation, Insurance company as bound by greater coverage in earlier policy where renewal policy is issued without calling to insured’s attention a reduction the policy coverage, 91 A.L.R.2d 546 § 3 (2024 update) (“The general rule is that an insurance company is bound by the greater coverage in an earlier policy where the renewal policy is issued without calling to the insured’s attention a reduction in the policy coverage.”). In their consideration, the court relied on Idado Code section 41-1842(5), which requires an insurer to notify a named insured of, among other things, reductions in limits or reductions in coverages. In doing so, they found that statute applied to the policy at issue here. 

The court then turned to the policies to determine whether there was a change in policy and, in doing so, applied the well-established rules of interpreting insurance contracts. The court construes insurance contracts to the general rules of contract law, and in determining if any ambiguity exists, the court must construe the policy as a whole and not by isolated terms of phrase. If the language used is unambiguous, the plain and ordinary meaning of the words used in the policy must be construed most strongly against the insurer. Here, the court found that the policies were ambiguous as to the interpretation of landslide and, therefore, the 2016 policy reduced the coverage available for landslides by excluding human-caused landslides. 

In determining whether notice was provided, the Idaho Supreme Court found there was a requirement for something more than the delivery of an insurance policy and, in doing so, held that “it is a broadly accepted rule that insurers must provide adequate notice of changes in coverage to insureds in the context of a renewal because the law does not impose a duty on the insured to scour a renewal policy for changes absent notice from the insurer…” As Auto-Owners only mailed a copy of the policy, the court held it did not fulfill the written requirement notice. Therefore, the coverage provided for in the 2015 policy remained in effect until 30 days after notice was given or BrunoBuilt obtained replacement coverage. 

This case sets forth the written notice requirement that can come into play that requires insurers to take additional steps above and beyond mailing a copy of the policy when there is a change in coverage in the context of a renewal. 


 

Legal Update for Insurance Agents & Brokers - February 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Thought Leadership

Pennsylvania Superior Court Reaffirms Liberal Pleading Standard in Medical Malpractice Actions

Legal Roundup: Pennsylvania The Pennsylvania Superior Court has reinforced a broader fact-pleading approach that may make it more difficult for health care defendants to obtain dismissal at the preliminary objection stage. In DaSilva v. Abington Memorial Hospital, the court held that the plaintiffs’ second amended complaint satisfied Pennsylvania’s fact‑pleading requirements despite the absence of individually named negligent actors. In DaSilva, the plaintiffs filed a second amended complaint alleging that Abington Memorial Hospital was directly and vicariously negligent after the patient, who was experiencing a mental health crisis, was left unattended by hospital staff, exited the emergency department, and was struck by a vehicle, suffering serious injuries. The trial court sustained the hospital’s preliminary objections and dismissed the complaint with prejudice, stating plaintiffs “failed to plead any material factual allegations in support of their claims of negligence [and] set forth vague allegations of negligence and unidentified agency.” Id. at *5. The plaintiffs appealed. On appeal, the Superior Court reversed, holding that the complaint sufficiently pled negligence and vicarious liability claims under Pa.R.C.P. 1019(a). The court concluded that allegations describing the patient’s condition, the hospital’s awareness of that condition, and the alleged failure to monitor or prevent elopement were adequate to satisfy Pennsylvania’s pleading requirements. Significantly, the court rejected the hospital’s argument that the complaint failed because it did not identify the specific employees responsible for the alleged negligence. Instead, the court found that generalized references to “emergency room staff” were sufficient to place the hospital on notice of the claims because “the names of those who performed services for the plaintiff are known to the defendant or can be ascertained during discovery.” Id. at *12 (citing Est. of Denmark ex rel. Hurst v. Williams, 117 A.3d 300, 307 (Pa. Super. 2015)). The effect of DaSilva is that plaintiffs may proceed past the pleading stage with relatively generalized allegations, particularly in cases involving institutional defendants where relevant details are uniquely within the defendant’s control. As a result, health care defendants should anticipate that challenges to claim sufficiency may be resolved in the later stages of litigation, including discovery and summary judgment.

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Thought Leadership

The Ohio Supreme Court Extends Sham-Affidavit Rule to Contradictory Expert Reports

Legal Roundup: Ohio In its June 23, 2026, decision in Moore v. Mercy Medical Center, the Ohio Supreme Court upheld a trial court’s decision to strike an expert witness’s affidavit that contradicted the opinions expressed in the expert’s prior report. This case pertains to allegations of medical malpractice after plaintiff Cheri Moore gave birth to an infant in respiratory distress who required intubation. Moore alleged that a delay in ordering an emergency cesarean section resulted in the need for intubation, causing her child’s injuries. Specifically, Moore sued Dr. Meniru, who completed his first shift at 7:00 a.m. on May 28, 2015, and did not resume treating Moore until 7:00 a.m. on May 29, 2015. One of Moore’s expert witnesses authored a report stating that the doctors, including Dr. Meniru, deviated from the standard of care by not advocating for a cesarean section in the evening of May 28, 2015. Based on this report, Dr. Meniru moved for summary judgment, arguing that the alleged breach occurred during a period when he was not on duty. In response to the summary judgment motion, the plaintiff filed an affidavit from the same expert. Although the expert expressly incorporated his previous report into his affidavit, he also offered an additional opinion: that Dr. Meniru breached the standard of care by failing to begin a cesarean section within 30 minutes of receiving reports of fetal distress. Dr. Meniru filed a motion to strike the expert’s affidavit, arguing that it contradicted the opinions set forth in his prior report in violation of the sham-affidavit rule. The sham-affidavit rule applies to “a contradictory affidavit that indicates only that the affiant cannot maintain a consistent story, or is willing to offer a statement solely for the purpose of defeating summary judgment”. Moore, supra, at ¶ 19, citing Pettiford v. Aggarwal, 126 Ohio St.3d 413, 2010-Ohio-3237. The trial court granted both the motion to strike and the motion for summary judgment, and the Fifth District affirmed. The Ohio Supreme Court accepted two questions of law: (1) whether the sham-affidavit rule applies when the sworn testimony contradicts prior unsworn statements; and (2) whether an inconsistency within the affidavit goes to credibility or admissibility, justifying an order striking the affidavit. Previous rulings by the Ohio Supreme Court regarding the sham-affidavit rule have pertained to contradictions between an affidavit and sworn deposition testimony. See, e.g., Byrd v. Smith, 2006- Ohio-3455, 110 Ohio St.3d 24, 850 N.E.2d 47. However, here, the Court was asked to apply the same rule to contradictions between a sworn affidavit and an unsworn expert report. The Court held that, because Moore’s expert incorporated his prior report into his affidavit, he effectively adopted the report as part of his sworn testimony.