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Federal court rules for Axis in delayed claims case



A federal appeals court on Wednesday upheld a lower court decision in favor of Axis Insurance Co. in a case involving late submission of a claim submitted under an indemnity policy.

Miami-based Georgian American Alloys was among the companies sued in May 2019 by a Ukrainian bank that alleged it engaged in “fresh fraudulent schemes orchestrated by Ukrainian oligarchs,” according to a filing in the case. Georgian American Alloys et al. v. Axis Insurance Co.

Axis contested the plaintiffs’ claims in the case, claiming that the claim was filed months after the deadline for filing it had passed.

The plaintiffs filed suit in US District Court in Wilmington, Delaware, claiming extenuating circumstances created by the Covid-1

9 pandemic caused the late filing.

The district court ruled in favor of the insurer and was affirmed by a three-judge panel of the 3rd US Circuit Court of Appeals in Philadelphia.

“GAA argues that under Delaware law, Axis must show prejudice to support a denial of coverage based on an untimely claim under a claim policy. Axis, however, argues that the prejudice requirement does not apply,” the ruling states.

The panel agreed with the insurer. “The Delaware Supreme Court has not yet directly decided the issue of whether a casualty insurer can deny coverage based on late notice of a claim without showing prejudice,” it said.

But state courts “that have reviewed this issue agree that Delaware law does not condition the denial of coverage under a claims-made policy on a showing of prejudice,” it said, in affirming the lower court’s decision.

The GAA should have reported the claim by 29 February 2020, 90 days after the end of the policy period on 1 December 2019, not 21 April 2020, almost two months later, it said.

Attorneys in the case did not respond to requests for comment.


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