New Insurance Disclosure Law in New York Impacts Pending and Future Litigation (UPDATED)

Orrick, Herrington & Sutcliffe LLP

Orrick, Herrington & Sutcliffe LLP

First published January.12.2022; updated January.24.2022

On December 31, 2021 New York Governor Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act (the “Act”), placing significant burdens on defendants in litigation. Under the Act defendants must produce relevant insurance information, such as complete copy of any insurance policy, contract or agreement, through which a judgment could be satisfied. The Act is effective immediately (amendments are proposed and detailed below) and requires all pending cases to comply by March 1, 2022. Governor Hochul stated its purpose is to “ensure that parties in a litigation are correctly informed about the limits of potential insurance coverage.” On January 18, 2022, the New York State Senate Rules Committee approved Senate Bill S7882, which, if passed, could narrow the scope of the Act and reduce some of the burden placed on defendants.

Significant Impact

The Act will impact all defendants in litigation that may be covered by insurance, but will vary based on the subject of the litigation. We foresee extensive issues and burdens particularly on clients involved in mass tort cases covered by historic policies, and other cases where policies apply to multiple claims, including D&O, E&O and cyber polices.

Original Requirements

In its current form (which, as noted below, is subject to narrowing amendments now under consideration), the Act requires that a defendant provide a plaintiff with the following information within 60 days of filing its answer to a lawsuit:

  • A complete copy of any insurance policy under which any person or entity may be liable to satisfy part or all of a judgment that may be entered.
  • The contact information, including telephone numbers and email addresses, of adjusters and third-party administrators.
  • The amounts available to satisfy a judgment under the policy/policies.
  • Information pertaining to any lawsuits that have reduced the amounts available under the policy/policies, including the caption of the lawsuit, the date the lawsuit was filed and the identity and contact information of the attorneys for all represented parties therein.
  • The amount of any payment of attorneys’ fees that have eroded the amounts available under the policy along with the name and addresses of any attorney who received such payments.
  • The application(s) for insurance.

The Act imposes a continuing obligation on defendants to provide updated disclosures within thirty days of receiving information that renders prior disclosures inaccurate or incomplete. This obligation extends throughout the pendency of the litigation and for 60 days after a settlement or final judgment.

Additionally, all information must be accompanied by a certification that the information is complete and accurate.

The law is silent as to what penalty an organization may face if it fails to provide required insurance information.

Potential Amendments

Governor Hochul’s agreement to sign the legislation was reportedly accompanied by an approval memorandum, which explained that the Governor signed the legislation based on “an agreement with the Legislature to ensure that the scopes of the insurance coverage information that parties must provide is properly tailored for the intended purpose.” The amended bill is now waiting for formal presentation to both the Senate and the Assembly. If S7882 is passed and signed, the amendments would modify the Act as follows:

  • Eliminating the retroactive disclosure requirements (meaning defendants in litigation pending prior to December 31, 2021 would be relieved from complying with the Act).
  • Altering the time limit to comply with CPLR 3101(f) from 60 days to 90 days.
  • Allowing defendants to produce the declaration page of a policy, instead of a complete copy, if the plaintiff agrees in writing.
  • Limiting disclosures to only insurance policies that "relate to the claim being litigated."
  • Only the total limits available under the policy, which is defined as the "actual funds, after taking into account erosion and any other offsets," need to be disclosed.
  • Eliminating defendants’ obligation to disclose policy applications, such as lawsuits or attorney’s fees that may have eroded the remaining value of the policy.
  • Only the name and email address of a person responsible for adjusting the claim must be provided.
  • Defendants are only required to make "reasonable efforts" to ensure the information previously disclosed is accurate, complete, and up-to-date at specific stages of the litigation, including: (i) when the note of issue is filed; (ii) when entering into any formal settlement negotiations conducted or supervised by the court; (iii) at voluntary mediation; and (iv) when the case is called for trial.
  • Actions brought to recover personal injury protection or no-fault benefits are excluded from these disclosure requirements.


As currently drafted, the law’s heightened and mandatory disclosure requirements may impose a significant burden on defendants and their counsel to make extensive disclosures and monitor for changes impacting disclosures. Clients should be mindful of the disclosure burdens this law places on defendants. In addition to the procedural burdens, including the ongoing disclosure obligations, there are significant burdens that will vary depending on the subject matter of the litigation and the types of insurance policies at issue. For example:

  • For defendants in mass tort cases alleging bodily injury, the applicable insurance policies likely include occurrence-based commercial general liability (CGL) policies. Because the occurrence triggering coverage may have occurred years—if not decades—earlier and continued for years, multiple historic policies may be implicated. Under the Act, a defendant would have onerous disclosure obligations to find and produce those policies.
  • For defendants facing negligence claims, claims-made policies such as errors & omissions (E&O), directors & officers (D&O), and cyber insurance policies may be in play. The aggregate limits of these policies, which typically are eroded by the payment of defense costs, may have been eroded by a variety of unrelated claims during the policy period, including confidential claims. For example, a client facing a securities claim covered by its D&O policy may also be faced with confidential regulatory investigations that have covered defense costs. Also, if a technology provider has a temporary network outage a client may make a written demand for the negligent performance of services, which would be covered under the E&O policy. If that company is then a defendant in a separate lawsuit covered by the policy, the organization may have to disclose the amount by which that demand eroded the available insurance coverage.
  • A defendant may also be a subsidiary of a company with a master insurance policy that provides coverage in excess of the defendant’s insurance policy. A plaintiff may argue that the Act requires the defendant to produce a copy of that master policy and disclose its limits, which may be many multiples of the defendant’s available insurance coverage.
  • The Act’s requirement of disclosure of depletion of insurance coverage limits, including the names of defense counsel receiving such payments, may require disclosure of another matter that requires defense coverage—for example, a confidential regulatory investigation or proceeding against the defendant company and/or its officers.

The Act is likely to raise multiple questions, which may be addressed by the court or S7882. Defendants in pending New York civil litigation may need to be in compliance with the Act’s current disclosure requirements by March 1, 2022 if the amended bill is not passed soon. As a result of any uncertainty regarding the current scope of the bill, organizational defendants and their insurers should include precautionary language in their disclosures to mitigate the risk of insufficient disclosures.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Orrick, Herrington & Sutcliffe LLP

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