Correct decision – poor execution
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Is there anything more exciting than a re-opening? Gola Supermarket, Inc., purchased an existing grocery store – including the insurance coverage. The agent notified the insurance carrier of the change in ownership and the policy was endorsed to reflect the change.
Later, an underwriter made an important decision -- Gola Supermarket should not be renewed. This decision was carried out by sending a nonrenewal notice two months in advance of the expiration date to the named insured. One small mistake was made in the execution. The nonrenewal notice was sent to the old named insured.
A fire occurred two months after the policy expiration and the underwriter knew the right decision had been made. Unfortunately, a right decision only works if it is followed by correct execution. Since the notice was not sent to the new named insured, it was not valid; the policy remained in effect and the insurance carrier was ordered to pay the loss.
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