New Insurance Disclosure Law in New York Impacts Pending and Future Litigation

Complex Litigation & Dispute Resolution Alert

First published January.28.2022; updated February.28.2022

On February 24, 2022, New York Governor Kathy Hochul signed into law an amended version of the Comprehensive Insurance Disclosure Act (the “Act”), which requires defendants to make certain insurance disclosures within 90 days of filing an answer to a lawsuit. Governor Hochul had previously signed a more burdensome version of the Act into law on December 31, 2021, with an accompanying approval memorandum, stating that an agreement was in place with the legislature to tailor the scope of the bill. The amended Act resolves many of the burdens we described in our initial alert.

Under the Act, defendants must produce relevant insurance information, such as a complete copy of any insurance policy, contract or agreement through which a judgment could be satisfied, and the total limits available under the policy. The Act is effective immediately and applies only to litigation filed on or after December 31, 2021. Governor Hochul has stated the Act’s purpose is to “ensure that parties in a litigation are correctly informed about the limits of potential insurance coverage.”

Significant Impact

The Act will impact all defendants in litigation that may be covered by insurance but will vary based on the subject of the litigation. We foresee extensive issues and burdens particularly on clients involved in mass tort cases covered by historic policies, and other cases where policies apply to multiple claims, including D&O, E&O and cyber polices.

New Requirements

In its amended form, the Act requires that a defendant provide a plaintiff with the following information within 90 days of filing its answer to a lawsuit:

  • A complete copy of any insurance policy, contract, or agreement under which any person or entity may be liable to satisfy part or all of a judgment that may be entered in an action or to indemnify or reimburse for payments made to satisfy the entry of final judgment, insofar as these documents relate to the claim being litigated.
  • The contact information, including only the name and email, of an assigned individual responsible for adjusting the claim at issue.
  • The total limits available under the policy, which is defined as the “actual funds, after taking into account erosion and any other offsets.”
  • If the plaintiffs agree in writing, defendants may produce a declaration page of a policy, instead of a complete copy.

Under the amended Act, an application for insurance is not treated as part of the insurance agreement. The disclosure of policy limits under the Act do not constitute an admission that an alleged injury or damage is covered by the policy.

Critically, the amended Act does not apply to litigation pending before December 31, 2021. Actions brought to recover personal injury protection or no-fault benefits are also excluded from these disclosure requirements.

The Act imposes a continuing obligation on defendants to provide updated disclosures. Defendants are required to make “reasonable efforts” to ensure the information previously disclosed is accurate, complete, and up-to-date at specific stages of the litigation, including: (i) when the note of issue is filed; (ii) when entering into any formal settlement negotiations conducted or supervised by the court; (iii) when at voluntary mediation; and (iv) when the case is called for trial.

The law is silent as to what penalty an organization may face if it fails to provide required insurance information.

The amended Act significantly narrowed the scope of the Act. The previous version of the bill required defendants to disclose how any insurance policy limit had been depleted, including the names of lawsuits and the corresponding amount of attorney’s fee expended in each suit. Additionally, the old version of the bill required a complete production of the insurance policy, irrespective of whether the policy “related to the claim being litigated.” The new act also gives defendants 90 days, instead of 60 days, to provide the required insurance disclosures.


The law’s heightened and mandatory disclosure requirements may impose a significant burden on defendants and their counsel to make extensive disclosures and monitor for changes impacting disclosures. Clients should be mindful of the disclosure burdens this law places on defendants. In addition to the procedural burdens, including the ongoing disclosure obligations, there are significant burdens that will vary depending on the subject matter of the litigation and the types of insurance policies at issue. For example:

  • For defendants in mass tort cases alleging bodily injury, the applicable insurance policies likely include occurrence-based commercial general liability (CGL) policies. Because the occurrence triggering coverage may have occurred years—if not decades—earlier and continued for years, multiple historic policies may be implicated. Under the Act, a defendant would have onerous disclosure obligations to find and produce those policies.
  • For defendants facing negligence claims, claims-made policies such as errors & omissions (E&O), directors & officers (D&O), and cyber insurance policies may be in play. The aggregate limits of these policies, which typically are eroded by the payment of defense costs, may have been eroded by a variety of unrelated claims during the policy period, including confidential claims. For example, a client facing a securities claim covered by its D&O policy may also be faced with confidential regulatory investigations that have covered defense costs. Also, if a technology provider has a temporary network outage a client may make a written demand for the negligent performance of services, which would be covered under the E&O policy. If that company is then a defendant in a separate lawsuit covered by the policy, the organization may have to disclose the amount by which that demand eroded the available insurance coverage.
  • A defendant may also be a subsidiary of a company with a master insurance policy that provides coverage in excess of the defendant’s insurance policy. A plaintiff may argue that the Act requires the defendant to produce a copy of that master policy and disclose its limits, which may be many multiples of the defendant’s available insurance coverage.
  • The Act’s requirement of disclosure of depletion of insurance coverage limits may require signal to plaintiffs that another matter required defense coverage—for example, a confidential regulatory investigation or proceeding against the defendant company and/or its officers.

The Act is likely to raise multiple questions, which may be addressed by the court. As a result of any uncertainty regarding the current scope of the bill, organizational defendants and their insurers should include precautionary language in their disclosures to mitigate the risk of insufficient disclosures.