New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter B - Property and Casualty Insurance
Part 71 - Legal Defense Costs In Liability Policies
Section 71.4 - Separate defense limit

Universal Citation: 11 NY Comp Codes Rules and Regs ยง 71.4

Current through Register Vol. 46, No. 12, March 20, 2024

(a) A liability insurance policy that provides for payment of legal defense costs under a separate defense limit, as specified in subdivision (b) of this section, may be issued or renewed in this State.

(b) The policy shall provide coverage for pollution liability or environmental impairment and shall be issued or renewed to an owner or operator of underground storage tanks in order to satisfy the financial responsibility requirements promulgated by the Federal Environmental Protection Agency.

(c) The policy shall provide that:

(1) There shall be a per claim liability limit, and there may be an annual aggregate limit, subject to the following minimum limits:

Type of insured

Monthly facility throughput (gallons)

No. of tanks

Minimum limits

Per claim

Annual aggregate
Petroleum Nonmarketer 10,000 or less 100 or less $ 500,000 $1,000,000
10,000 or less 101 or more $ 500,000 $2,000,000
10,001 or more 100 or less $1,000,000 $1,000,000
10,001 or more 101 or more $1,000,000 $2,000,000
Petroleum Marketer N/A 100 or less $1,000,000 $1,000,000
N/A 101 or more $1,000,000 $2,000,000

(2) The per claim liability limit and any annual aggregate limit shall not be reduced by the payment of legal defense costs.

(3) The separate defense limit shall:
(i) apply to each claim in an amount at least 50 percent of the per claim liability limit applicable to such claim;

(ii) for policies without an annual aggregate limit, apply to all claims in an amount no less than the per claim liability limit; or

(iii) for policies with an annual aggregate limit, if the insurer simultaneously offers the insured the option of purchasing a separate defense limit in an amount at least 50 percent of the annual aggregate limit, apply to all claims in an amount equal to the greater of 25 percent of the annual aggregate limit or $500,000.

(4) If the per claim liability limit or any annual aggregate limit becomes exhausted, the insurer shall pay no further defense costs even if the separate defense limit has not been exhausted.

(d) If legal services insurance is a part of the policy, then the separate defense limit may not be reduced by greater than 25 percent.

Disclaimer: These regulations may not be the most recent version. New York may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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