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Does rescinding insurance policy bar an injured party’s claim?

When a court rescinds an insurance policy, does the injured party still have a claim for damages?

By Charles Toutant, New Jersey Law Journal | Updated on January 04, 2017
A third party has a right to be heard in a case between the insured and its insurance company over whether the policy is in effect a New Jersey court has ruled. (Photo: Shutterstock)

A town’s insurance company can seek indemnification from a contractor over damage to its municipal building, even after the contractor’s insurer obtained a court order rescinding its policy, the New Jersey Superior Court Appellate Division has ruled.

Travelers Property Casualty Co. of America, the insurance company for the town of Cliffside Park, had an independent right to seek relief against the construction company’s insurer, no matter what occurred in litigation between the construction company and its insurer, the appeals court said Dec. 29 in Everest Indemnity Insurance v. Tim Tiger Enterprises. Everest claimed the judgment against its insured, Tim Tiger Enterprises, represented an adjudication of all issues in the case, but Judges Clarkson Fisher Jr., George Leone and Francis Vernoia said “Nothing could be more absurd.”

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