Failure by a school system to file an insurance claim in a timely manner has resulted in a declination of their insurance coverage. An article in the New York Times this morning (see here, $$) describes the situation that resulted in the claim, the late notice, and the resulting coverage issues.
According to the article, one or more employees of the Roslyn school district on Long Island stole a considerable sum of money. When the theft was first discovered the school system did not understand the full extent of the theft and decided not to file a claim. Later, as the true scope of the theft became apparent, a claim was filed under the school system’s fidelity bond and three of four insurers have declined to provide coverage.
A claim has also been made against board members because of the failure to report the claim in a timely manner and the loss of the insurance protection. Claims have also been made against the auditors, legal counsel and accounting software provider. Insurers for the board members are disputing coverage based on late reporting and failure to disclose the situation on the application.
This situation is a good example of the danger of late reporting. See a relevant prior post on claim reporting.
Update: See also Euclid Managers' excellent post on claim reporting (here).
Specialty Insurance Expertise: Tennant Risk Services
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