Claim Notification and Reservation of Rights: The
Sooner The Better Essential Guidance for Both Sides of an Insurance
Contract.
The Kansas Supreme Court's recent ruling in Becker v.
The Bar Plan Mutual Insurance Company1 revived an
investor's shot at recovering a $3.9 million judgment for legal
malpractice against his former attorney's insurer. Although the
bottom line of this decision may easily grab the attention of an
insurer (not to mention an attorney), the case offers essential
guidance to both sides of the insurance contract.
Background
An investor hired an attorney to represent him in a series of
loans to a commercial cleaning services company. The attorney
failed to perform a UCC search on the collateral the company owner
provided to secure the investor's loans. As a result, the
investor was unaware that the collateral was already subject to
another lender's security interest. Had the investor known, he
would not have made the loans.
