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This entry was published on 2020-04-24
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SECTION 3420
Liability insurance; standard provisions; right of injured person
Insurance (ISC) CHAPTER 28, ARTICLE 34
§ 3420. Liability insurance; standard provisions; right of injured
person. (a) No policy or contract insuring against liability for injury
to person, except as provided in subsection (g) of this section, or
against liability for injury to, or destruction of, property shall be
issued or delivered in this state, unless it contains in substance the
following provisions or provisions that are equally or more favorable to
the insured and to judgment creditors so far as such provisions relate
to judgment creditors:

(1) A provision that the insolvency or bankruptcy of the person
insured, or the insolvency of the insured's estate, shall not release
the insurer from the payment of damages for injury sustained or loss
occasioned during the life of and within the coverage of such policy or
contract.

(2) A provision that in case judgment against the insured or the
insured's personal representative in an action brought to recover
damages for injury sustained or loss or damage occasioned during the
life of the policy or contract shall remain unsatisfied at the
expiration of thirty days from the serving of notice of entry of
judgment upon the attorney for the insured, or upon the insured, and
upon the insurer, then an action may, except during a stay or limited
stay of execution against the insured on such judgment, be maintained
against the insurer under the terms of the policy or contract for the
amount of such judgment not exceeding the amount of the applicable limit
of coverage under such policy or contract.

(3) A provision that notice given by or on behalf of the insured, or
written notice by or on behalf of the injured person or any other
claimant, to any licensed agent of the insurer in this state, with
particulars sufficient to identify the insured, shall be deemed notice
to the insurer.

(4) A provision that failure to give any notice required to be given
by such policy within the time prescribed therein shall not invalidate
any claim made by the insured, an injured person or any other claimant
if it shall be shown not to have been reasonably possible to give such
notice within the prescribed time and that notice was given as soon as
was reasonably possible thereafter.

(5) A provision that failure to give any notice required to be given
by such policy within the time prescribed therein shall not invalidate
any claim made by the insured, injured person or any other claimant,
unless the failure to provide timely notice has prejudiced the insurer,
except as provided in paragraph four of this subsection. With respect to
a claims-made policy, however, the policy may provide that the claim
shall be made during the policy period, any renewal thereof, or any
extended reporting period, except as provided in paragraph four of this
subsection. As used in this paragraph, the terms "claims-made policy"
and "extended reporting period" shall have their respective meanings as
provided in a regulation promulgated by the superintendent.

(6) A provision that, with respect to a claim arising out of death or
personal injury of any person, if the insurer disclaims liability or
denies coverage based upon the failure to provide timely notice, then
the injured person or other claimant may maintain an action directly
against such insurer, in which the sole question is the insurer's
disclaimer or denial based on the failure to provide timely notice,
unless within sixty days following such disclaimer or denial, the
insured or the insurer: (A) initiates an action to declare the rights of
the parties under the insurance policy; and (B) names the injured person
or other claimant as a party to the action.

(b) Subject to the limitations and conditions of paragraph two of
subsection (a) of this section, an action may be maintained by the
following persons against the insurer upon any policy or contract of
liability insurance that is governed by such paragraph, to recover the
amount of a judgment against the insured or his personal representative:

(1) any person who, or the personal representative of any person who,
has obtained a judgment against the insured or the insured's personal
representative, for damages for injury sustained or loss or damage
occasioned during the life of the policy or contract;

(2) any person who, or the personal representative of any person who,
has obtained a judgment against the insured or the insured's personal
representative to enforce a right of contribution or indemnity, or any
person subrogated to the judgment creditor's rights under such judgment;
and

(3) any assignee of a judgment obtained as specified in paragraph one
or paragraph two of this subsection, subject further to the limitation
contained in section 13-103 of the general obligations law.

(c) (1) If an action is maintained against an insurer under the
provisions of paragraph two of subsection (a) of this section and the
insurer alleges in defense that the insured failed or refused to
cooperate with the insurer in violation of any provision in the policy
or contract requiring such cooperation, then the burden shall be upon
the insurer to prove such alleged failure or refusal to cooperate.

(2)(A) In any action in which an insurer alleges that it was
prejudiced as a result of a failure to provide timely notice, the burden
of proof shall be on: (i) the insurer to prove that it has been
prejudiced, if the notice was provided within two years of the time
required under the policy; or (ii) the insured, injured person or other
claimant to prove that the insurer has not been prejudiced, if the
notice was provided more than two years after the time required under
the policy.

(B) Notwithstanding subparagraph (A) of this paragraph, an
irrebuttable presumption of prejudice shall apply if, prior to notice,
the insured's liability has been determined by a court of competent
jurisdiction or by binding arbitration; or if the insured has resolved
the claim or suit by settlement or other compromise.

(C) The insurer's rights shall not be deemed prejudiced unless the
failure to timely provide notice materially impairs the ability of the
insurer to investigate or defend the claim.

(d)(1)(A) This paragraph applies with respect to a liability policy
that provides coverage with respect to a claim arising out of the death
or bodily injury of any person, where the policy is: (i) subject to
section three thousand four hundred twenty-five of this article, other
than an excess liability or umbrella policy; or (ii) used to satisfy a
financial responsibility requirement imposed by law or regulation.

(B) Upon an insurer's receipt of a written request by an injured
person who has filed a claim or by another claimant, an insurer shall,
within sixty days of receipt of the written request: (i) confirm to the
injured person or other claimant in writing whether the insured had a
liability insurance policy of the type specified in subparagraph (A) of
this paragraph in effect with the insurer on the date of the alleged
occurrence; and (ii) specify the liability insurance limits of the
coverage provided under the policy.

(C) If the injured person or other claimant fails to provide
sufficient identifying information to allow the insurer, in the exercise
of reasonable diligence, to identify a liability insurance policy that
may be relevant to the claim, the insurer shall within forty-five days
of receipt of the written request, so advise the injured person or other
claimant in writing and identify for the injured person or other
claimant the additional information needed. Within forty-five days of
receipt of the additional information, the insurer shall provide the
information required under subparagraph (B) of this paragraph.

(2) If under a liability policy issued or delivered in this state, an
insurer shall disclaim liability or deny coverage for death or bodily
injury arising out of a motor vehicle accident or any other type of
accident occurring within this state, it shall give written notice as
soon as is reasonably possible of such disclaimer of liability or denial
of coverage to the insured and the injured person or any other claimant.

(e) No policy or contract of personal injury liability insurance or of
property damage liability insurance, covering liability arising from the
ownership, maintenance or operation of any motor vehicle or of any
vehicle as defined in section three hundred eighty-eight of the vehicle
and traffic law, or an aircraft, or any vessel as defined in section
forty-eight of the navigation law, shall be issued or delivered in this
state to the owner thereof, or shall be issued or delivered by any
authorized insurer upon any such vehicle or aircraft or vessel then
principally garaged or principally used in this state, unless it
contains a provision insuring the named insured against liability for
death or injury sustained, or loss or damage occasioned within the
coverage of the policy or contract, as a result of negligence in the
operation or use of such vehicle, aircraft or vessel, as the case may
be, by any person operating or using the same with the permission,
express or implied, of the named insured.

(f) (1) No policy insuring against loss resulting from liability
imposed by law for bodily injury or death suffered by any natural person
arising out of the ownership, maintenance and use of a motor vehicle or
an altered motor vehicle commonly referred to as a "stretch limousine"
having a seating capacity of eight or more passengers used in the
business of carrying or transporting passengers for hire, by the insured
shall be issued or delivered by any authorized insurer upon any motor
vehicle or an altered motor vehicle commonly referred to as a "stretch
limousine" having a seating capacity of eight or more passengers used in
the business of carrying or transporting passengers for hire, then
principally garaged or principally used in this state unless it contains
a provision whereby the insurer agrees that it will pay to the insured,
as defined in such provision, subject to the terms and conditions set
forth therein to be prescribed by the board of directors of the Motor
Vehicle Accident Indemnification Corporation and approved by the
superintendent, all sums, not exceeding a maximum amount or limit of
twenty-five thousand dollars exclusive of interest and costs, on account
of injury to and all sums, not exceeding a maximum amount or limit of
fifty thousand dollars exclusive of interest and costs, on account of
death of one person, in any one accident, and the maximum amount or
limit, subject to such limit for any one person so injured of fifty
thousand dollars or so killed of one hundred thousand dollars, exclusive
of interest and costs, on account of injury to, or death of, more than
one person in any one accident, which the insured or his legal
representative shall be entitled to recover as damages from an owner or
operator of an uninsured motor vehicle, unidentified motor vehicle which
leaves the scene of an accident, a motor vehicle registered in this
state as to which at the time of the accident there was not in effect a
policy of liability insurance, a stolen vehicle, a motor vehicle
operated without permission of the owner, an insured motor vehicle where
the insurer disclaims liability or denies coverage or an unregistered
vehicle because of bodily injury, sickness or disease, including death
resulting therefrom, sustained by the insured, caused by accident
occurring in this state and arising out of the ownership, maintenance or
use of such motor vehicle. No payment for non-economic loss shall be
made under such policy provision to a covered person unless such person
has incurred a serious injury, as such terms are defined in section five
thousand one hundred two of this chapter. Such policy shall not
duplicate any element of basic economic loss provided for under article
fifty-one of this chapter. No payments of first party benefits for basic
economic loss made pursuant to such article shall diminish the
obligations of the insurer under this policy provision for the payment
of non-economic loss and economic loss in excess of basic economic loss.
Notwithstanding any inconsistent provisions of section three thousand
four hundred twenty-five of this article, any such policy which does not
contain the aforesaid provisions shall be construed as if such
provisions were embodied therein.

(2) (A) Any such policy shall, at the option of the insured, also
provide supplementary uninsured/underinsured motorists insurance for
bodily injury, in an amount up to the bodily injury liability insurance
limits of coverage provided under such policy, subject to a maximum of
two hundred fifty thousand dollars because of bodily injury to or death
of one person in any one accident and, subject to such limit for one
person, up to five hundred thousand dollars because of bodily injury to
or death of two or more persons in any one accident, or a combined
single limit policy of five hundred thousand dollars because of bodily
injury to or death of one or more persons in any one accident; and any
such policy insuring against loss resulting from liability imposed by
law for bodily injury or death suffered by any natural person arising
out of the ownership, maintenance, and use of an altered motor vehicle
commonly referred to as a "stretch limousine" having a seating capacity
of eight or more passengers used in the business of carrying or
transporting passengers for hire, shall provide supplementary
uninsured/underinsured motorists insurance for bodily injury, in an
amount of a combined single limit of one million five hundred thousand
dollars because of bodily injury or death of one or more persons in any
one accident. Provided however, an insurer issuing any such policy,
except a policy insuring against loss resulting from liability imposed
by law for bodily injury or death suffered by any natural person arising
out of the ownership, maintenance, and use of an altered motor vehicle
commonly referred to as a "stretch limousine" having a seating capacity
of eight or more passengers used in the business of carrying or
transporting passengers for hire, in lieu of offering to the insured the
coverages stated above, may provide supplementary uninsured/underinsured
motorists insurance for bodily injury, in an amount up to the bodily
injury liability insurance limits of coverage provided under such
policy, subject to a maximum of one hundred thousand dollars because of
bodily injury to or death of one person in any one accident and, subject
to such limit for one person, up to three hundred thousand dollars
because of bodily injury to or death of two or more persons in any one
accident, or a combined single limit policy of three hundred thousand
dollars because of bodily injury to or death of one or more persons in
any one accident, if such insurer also makes available a personal
umbrella policy with liability coverage limits up to at least five
hundred thousand dollars which also provides coverage for supplementary
uninsured/underinsured motorists claims. Supplementary
uninsured/underinsured motorists insurance shall provide coverage, in
any state or Canadian province, if the limits of liability under all
bodily injury liability bonds and insurance policies of another motor
vehicle liable for damages are in a lesser amount than the bodily injury
liability insurance limits of coverage provided by such policy. Upon
written request by any insured covered by supplemental
uninsured/underinsured motorists insurance or his duly authorized
representative and upon disclosure by the insured of the insured's
bodily injury and supplemental uninsured/underinsured motorists
insurance coverage limits, the insurer of any other owner or operator of
another motor vehicle against which a claim has been made for damages to
the insured shall disclose, within forty-five days of the request, the
bodily injury liability insurance limits of its coverage provided under
the policy or all bodily injury liability bonds. The time of the insured
to make any supplementary uninsured/underinsured motorist claim, shall
be tolled during the period the insurer of any other owner or operator
of another motor vehicle that may be liable for damages to the insured,
fails to so disclose its coverage. As a condition precedent to the
obligation of the insurer to pay under the supplementary
uninsured/underinsured motorists insurance coverage, the limits of
liability of all bodily injury liability bonds or insurance policies
applicable at the time of the accident shall be exhausted by payment of
judgments or settlements.

(B) In addition to the notice provided, upon issuance of a policy of
motor vehicle liability insurance pursuant to regulations promulgated by
the superintendent, insurers shall notify insureds, in writing, of the
availability of supplementary uninsured/underinsured motorists coverage.
Such notification shall contain an explanation of supplementary
uninsured/underinsured motorists coverage and the amounts in which it
can be purchased. Subsequently, a notification of availability shall be
provided at least once a year and may be simplified pursuant to
regulations promulgated by the superintendent, but must include a
concise statement that supplementary uninsured/underinsured motorists
coverage is available, an explanation of such coverage, and the coverage
limits that can be purchased from the insurer.

* (2-a) (A) Notwithstanding paragraph two of this subsection, this
paragraph shall apply to any new insurance policy or contract subject to
this subsection entered into after the effective date of this paragraph.
This paragraph shall not be deemed to apply to any policies originally
entered into prior to the effective date of this paragraph, but renewed
after the effective date of this paragraph, or to any policy of
commercial risk insurance. Any new insurance policy or contract entered
into after the effective date of this paragraph shall, at the option of
the first named insured, also provide supplementary
uninsured/underinsured motorists insurance for bodily injury, in an
amount equal to the bodily injury liability insurance limits of coverage
provided under such motor vehicle liability insurance policy; provided,
however, that a first named insured may exercise the choice to decline
such supplementary uninsured/underinsured motorists insurance or select
a lower amount of coverage through a written waiver signed, or
electronically signed, by such insured, subject to the requirements of
subparagraph (B) of this paragraph. Supplementary uninsured/underinsured
motorists insurance shall provide coverage, in any state or Canadian
province, if the limits of liability under all bodily injury liability
bonds and insurance policies of any other motor vehicle liable for
damages are in a lesser amount than the bodily injury liability
insurance limits of coverage provided by such policy. Upon written
request by any insured covered by supplemental uninsured/underinsured
motorists insurance or a duly authorized representative and upon
disclosure by the insured of the insured's bodily injury and
supplemental uninsured/underinsured motorists insurance coverage limits,
the insurer of any other owner or operator of another motor vehicle
against which a claim has been made for damages to the insured shall
disclose, within forty-five days of the request, the bodily injury
liability insurance limits of its coverage provided under the policy or
all bodily injury liability bonds. The time of the insured to make any
supplementary uninsured/underinsured motorist claim, shall be tolled
during the period the insurer of any other owner or operator of another
motor vehicle that may be liable for damages to the insured, fails to so
disclose its coverage. As a condition precedent to the obligation of the
insurer to pay under the supplementary uninsured/underinsured motorists
insurance coverage, the limits of liability of all bodily injury
liability bonds or insurance policies applicable at the time of the
accident shall be exhausted by payment of judgments or settlements.

(B) In addition to the notice provided, upon issuance of a policy of
motor vehicle liability insurance pursuant to regulations promulgated by
the superintendent, insurers shall notify insureds, in writing, of the
availability of supplementary uninsured/underinsured motorists coverage.
Such notification shall contain an explanation of supplementary
uninsured/underinsured motorists coverage and the amounts in which it
can be purchased. Subsequently, a notification of availability shall be
provided at least once a year and may be simplified pursuant to
regulations promulgated by the superintendent, but must include a
concise statement that supplementary uninsured/underinsured motorists
coverage is available, an explanation of such coverage, and the coverage
limits that can be purchased from the insurer. If an insured elects to
reject supplementary uninsured/underinsured motorist coverage or select
a lower amount of supplementary uninsured/underinsured motorist coverage
than the bodily injury liability insurance limits of coverage provided
under the insured's motor vehicle liability insurance policy, the
selection of lower supplementary uninsured/underinsured motorists
coverage or rejection of such coverage must be made on a written or
electronic form provided to the first named insured. Such form shall
also advise that such coverage is equal to the insured's bodily injury
liability limits under the motor vehicle liability insurance policy
unless lower limits are requested or the coverage is rejected.

(i) The form shall also advise that supplementary
uninsured/underinsured motorists coverage (sum coverage) provides
insurance protection for any person included as insured under your
policy if he or she is injured in an accident involving another motor
vehicle whose owner or operator was negligent but who has either no
bodily injury or liability insurance, or less than the insurance you
carry. Sum coverage shall be equal to the level of the bodily injury
liability coverage of your motor vehicle liability insurance policy
unless you sign a waiver requesting lower coverage or declining the
coverage. You are urged to carefully consider this decision.

(ii) An insured's written waiver shall apply to all subsequent
renewals of coverage and to all policies or endorsements which extend,
change, supersede, or replace an existing policy issued to the named
insured, unless changed in writing by any named insured.

(iii) The selection of lower supplementary uninsured/underinsured
motorists coverage or the rejection of such coverage by any first named
insured shall be binding upon all insureds under such policy.

(C) Notwithstanding the provisions of subparagraph (A) of this
paragraph, at the insurer's option, the insured's supplementary
uninsured/underinsured motorists coverage limit may be required to equal
the insured's bodily injury liability insurance limit under the motor
vehicle liability insurance policy.

(D) An insurer may provide the coverage described in this paragraph
available in an umbrella or excess liability policy if the umbrella or
excess liability policy expressly provides such coverage.

* NB Repealed June 30, 2023

(3) The protection provided by this subsection shall not apply to any
cause of action by an insured person arising out of a motor vehicle
accident occurring in this state against a person whose identity is
unascertainable, unless the bodily injury to the insured person arose
out of physical contact of the motor vehicle causing the injury with the
insured person or with a motor vehicle which the insured person was
occupying (meaning in or upon or entering into or alighting from) at the
time of the accident.

(4) An insurer shall give notice to the commissioner of motor vehicles
of the entry of any judgment upon which a claim is made against such
insurer under this subsection and of the payment or settlement of any
claim by the insurer.

(5) This paragraph shall apply to a policy that provides supplementary
uninsured/underinsured motorist insurance coverage for bodily injury and
is a policy: (A) issued or delivered in this state that insures against
liability arising out of the ownership, maintenance, and use of a fire
vehicle, as defined in section one hundred fifteen-a of the vehicle and
traffic law, where the fire vehicle is principally garaged or used in
this state; or (B) as specified in paragraph one of this subsection.
Every such policy that insures a fire department, fire company, as
defined in section one hundred of the general municipal law, an
ambulance service, or a voluntary ambulance service, as defined in
section three thousand one of the public health law, shall provide such
supplementary uninsured/underinsured motorist insurance coverage to an
individual employed by or who is a member of the fire department, fire
company, ambulance service, or voluntary ambulance service and who is
injured by an uninsured or underinsured motor vehicle while acting in
the scope of the individual's duties for the fire department, fire
company, ambulance service, or voluntary ambulance service covered under
the policy, except with respect to the use or operation by such an
individual of a motor vehicle not covered under the policy.

(g) No policy or contract shall be deemed to insure against any
liability of an insured because of death of or injuries to his or her
spouse or because of injury to, or destruction of property of his or her
spouse unless express provision relating specifically thereto is
included in the policy as provided in paragraphs one and two of this
subsection. This exclusion shall apply only where the injured spouse, to
be entitled to recover, must prove the culpable conduct of the insured
spouse.

(1) Upon written request of an insured, and upon payment of a
reasonable premium established in accordance with article twenty-three
of this chapter, an insurer issuing or delivering any policy that
satisfies the requirements of article six of the vehicle and traffic law
shall provide coverage against liability of an insured because of death
of or injuries to his or her spouse up to the liability insurance limits
provided under such policy even where the injured spouse, to be entitled
to recover, must prove the culpable conduct of the insured spouse. Such
insurance coverage shall be known as "supplemental spousal liability
insurance".

(2) Upon issuance of a motor vehicle liability policy that satisfies
the requirements of article six of the vehicle and traffic law and that
becomes effective on or after January first, two thousand three,
pursuant to regulations promulgated by the superintendent, the insurer
shall notify the insured, in writing, of the availability of
supplemental spousal liability insurance. Such notification shall be
contained on the front of the premium notice in boldface type and
include a concise statement that supplementary spousal coverage is
available, an explanation of such coverage, and the insurer's premium
for such coverage. Subsequently, a notification of the availability of
supplementary spousal liability coverage shall be provided at least once
a year in motor vehicle liability policies issued pursuant to article
six of the vehicle and traffic law, including those originally issued
prior to January first, two thousand three. Such notice must include a
concise statement that supplementary spousal coverage is available, an
explanation of such coverage, and the insurer's premium for such
coverage.

(h) In this section, the term "insurance upon any property or risk
located in this state" includes insurance against legal liability
arising out of the ownership, operation or maintenance of any vehicle
which is principally garaged or principally used in this state, or
arising out of the ownership, operation, use or maintenance of any
property which is principally kept or principally used in this state, or
arising out of any other activity which is principally carried on in
this state.

(i) Except as provided in subsection (j) of this section, the
provisions of this section shall not apply to any policy or contract of
insurance in so far as it covers the liability of an employer for
workers' compensation, if such contract is governed by the provisions of
section fifty-four of the workers' compensation law, or by any similar
law of another state, province or country, nor to the kinds of
insurances set forth in paragraph three of subsection (b) of section two
thousand one hundred seventeen of this chapter.

(j) (1) Notwithstanding any other provision of this chapter or any
other law to the contrary, every policy providing comprehensive personal
liability insurance on a one, two, three or four family owner-occupied
dwelling, issued or delivered in this state on and after the first of
March, nineteen eighty-four, shall provide for coverage against
liability for the payment of any obligation, which the policyholder may
incur pursuant to the provisions of the workers' compensation law, to an
employee arising out of and in the course of employment of less than
forty hours per week, in and about such residences of the policyholder
in this state. Such coverage shall provide for the benefits in the
standard workers' compensation policy issued in this state. No one who
purchases a policy providing comprehensive personal liability insurance
shall be deemed to have elected to cover under the workers' compensation
law any employee who is not required, under the provisions of such law,
to be covered.

(2) The term "policyholder" as used in this subsection shall be
limited to an individual or individuals as defined by the terms of the
policy, but shall not include corporate or other business entities or an
individual who has or individuals who have in effect a workers'
compensation policy which covers employees working in and about his or
their residence.

(3) Every insurer who is licensed by the superintendent to issue
homeowners or other policies providing comprehensive personal liability
insurance in this state shall also be deemed to be licensed to transact
workers' compensation insurance for the purpose of covering those
persons specified in this subsection.