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Monday, February 4, 2008

Piermont Iron Works Incorporated v. Evanston Insurance Company

01-09-08* A-5788/5803/5810/6079-05T3

We construed language in an umbrella insurance policy
requiring the carrier, a surplus lines insurer, to send the
insured notice of "nonrenewal" at least 30 days prior to the
expiration date of the policy. Although surplus lines carriers
are not subject to Banking and Insurance Department regulations
that require such advance notice of nonrenewal, we concluded
that the policy language should be construed in a manner
consistent with those regulations and consistent with record
evidence of the standard practice in the surplus lines industry.
Therefore, consistent with Barbara Corp. v. Bob Maneely Ins.
Agency, 197 N.J. Super. 339 (App. Div. 1984), app. dism., 102
N.J. 339 (1985), we concluded that the nonrenewal clause
required the insurer to give notice of a conditional as well as
an absolute intent not to renew the policy. Since the insurer
did not give the required notice, the policy did not expire and
there was coverage on the date the insured's employee was
involved in an on-the-job accident. [*Approved for Publication