Recently, resolving an insurance-coverage dispute, the U.S. Court of Appeals for the Third Circuit held that "for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract." The court's precedential ruling in Indian Harbor Insurance Co. v. F&M Equipment, Ltd., No.14-1897 (Oct.15, 2015), which is likely to have effects outside of the insurance-coverage context as well, means at the very least that when an insurance company promises to offer its insured a "renewal," it cannot simply offer a subsequent insurance policy with new terms, even if the insurer provides the policyholder notice of the changes.
In a recent client alert, members of Reed Smith's Insurance Recovery Group discuss the Third Circuit ruling and its implications for policyholders and insurers both.
This article is presented for informational purposes only and is not intended to constitute legal advice.
