The “failure to cooperate” defense is a defense an insurer may raise when its insured fails to cooperate with it in the defense of the claim against the insured. If an insurer takes this position, it will typically be denying both defense and indemnification obligations, meaning the insured could be forfeiting coverage that otherwise exists through his/her/its failure to cooperate with the insurer. This defense by the insurer is not absolute as recently explained by the Fourth District in Barthelemy v. Safeco Ins. Co. of Illinois, 43 Fla.L.Weekly D2379a (Fla. 4th DCA 2018) discussing the elements of this failure to cooperate defense.
In this case, dealing with an automobile accident, the insurer denied both defense and indemnification obligations to its insured under the failure to cooperate defense. The insurer argued its insured failed to cooperate by failing to submit three times to an Examination Under Oath (known as an “EUO”). As a result, the insurer did not provide its insured a defense in the underlying lawsuit that exposed the insured to judgments. The insured then sued its insurer for a declaratory judgment where the overriding issue was the insurer’s failure to cooperate defense.
The Fourth District confirmed that in a failure to cooperate defense case, “the insurer must show a material failure to cooperate which substantially prejudiced the insurer.” Barthelemy, supra, quoting Bankers Ins. Co. v. Macias, 475 So.2d 1216, 1218 (Fla. 1985). This means the insurer must show: (1) the insured materially failed to cooperate and (2) this material failure substantially prejudiced the insurer.
Please make sure to consult with counsel if your insurer raises this failure to cooperate defense or takes the position that you, as the insured, forfeited otherwise valid coverage under your insurance policy.
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