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Liability insurance policies typically require the insured to notify the insurance company "as soon as practicable" or "as soon as possible" of a suit or a potentially covered claim. Compliance with these "notice conditions" is often held to be a condition precedent to coverage under the policy, such that if the insured unreasonably delays notifying its carrier of a suit or claim, the insurer may be relieved of its duties under the policy. The purpose of these provisions is to protect the insurer by giving it adequate time to investigate the claim, control the litigation, posture the case for settlement, set reserves, and prevent fraud. <i>Sybron Transition Corp. v. Sec. Ins. Co. of Hartford</i>, 107 F.3d 1250, 1257 (7th Cir. 1997). But there is a cautionary note for insurers because the duty to provide prompt notice is not limited to the insured. Under limited circumstances, an insurer may be estopped from relying upon a coverage defense, such as late notice or an applicable exclusion from coverage, if it unreasonably delays denying coverage under the policy because, just like the insurer, the insured can potentially suffer prejudice from untimely communications. <i>Incorporated Village of Pleasantville v. Calvert Ins. Co.</i>, 612 N.Y.S.2d 441 (N.Y. App. Div. 1994); <i>Central Mut. Ins. Co. v. Kammerling</i>, 571 N.E.2d 806 (Ill. App. Ct. 1991). This article discusses the elements of estoppel barring coverage defenses, application of the defense in special circumstances involving settlement of the underlying claim, and what an insurer should do if it is uncertain as to whether coverage actually exists under the policy.

Highlights of the latest insurance cases from around the country.

The Texas Supreme Court unanimously has held that an insurer may recover from its own insured monies advanced by the insurer to settle an uncovered liability claim ' though the justices sharply divided on the rationale. The case, <i>Excess Underwriters at Lloyd's, London v. Frank's Casing Crew &amp; Rental Tools, Inc.</i>, No. 02-0730 (Tex. May 27, 2005), picks up the cudgels on this issue from the California Supreme Court's opinion in <i>Blue Ridge Ins. Co. v. Jacobsen</i>, 22 P.3d 313 (Cal. 2001) and seemingly abandons the prior decision in <i>Texas Ass'n of Counties County Gov't Risk Mgmt. Pool v. Matagorda County</i>, 52 S.W.3d 128 (Tex. 2000), which had cast substantial doubt on the viability of an insurer-recoupment claim, at the time seeming to bring Texas in line with Massachusetts on this issue. <i>See Med. Malpractice Joint Underwriting Ass'n of Massa-chusetts v. Goldberg</i>, 680 N.E.2d 1121 (Mass. 1997). <i>Frank's Casing</i> also parts company with the recent holding of the Illinois Supreme Court in <i>General Agents Insurance Company Of America, Inc. v. Midwest Sporting Goods Company</i>, 828 N.E.2d 1092 (Ill. March 24, 2005), which had rejected a carrier's claim for recoupment of defense costs, though on a basis that would bar recoupment of settlement or indemnity payments, too.

Allocation often is a key issue in insurance coverage cases where courts have found that long-term bodily injury or environmental contamination has taken place over many years. Occurrence-based policies typically provide coverage only for damages from injury taking place during the policy period. In many cases, courts have found it impossible to determine as a matter of fact precisely when injury took place or how much injury took place in any given period. They have thus presumed that injury took place over the entire period &mdash; often a very lengthy period &mdash; during which it may have taken place (<i>eg</i>, from first "exposure" until diagnosis of the injury or discovery of the contamination).

Recent rulings of interest to you and your practice.

Two years ago, the New York State Bar Association circulated a proposal that would add new consent grounds as well as unilateral no-fault grounds for divorce to the five fault grounds and one mutual-consent no-fault ground that already exist. Assemblywoman Helene Weinstein asked the author, along with others, to comment on the NYSBA proposal. Following are some of the observations the author made.

<b>Part One of a Two-Part Article</b>. There are as many ways of settling marital estates as there are creative attorneys and divorcing couples. Each permutation brings its own complications, including tax burdens to be allocated (and avoided). When the assets are to be paid out by one party to the other over time rather than in lump-sum amount, the tax consequences of the arrangement must be carefully considered.

More couples than ever are choosing to live together without benefit of marriage. Some simply reject the institution. Some are same-sex partners who cannot marry in New York or most other states. Others have been married previously and do not wish to jeopardize their separate governmental entitlements or to create marital rights that might conflict with their ability to control their separate property.