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Vermont Supreme Court Enforces Cooperation Clause and Forfeits Coverage

Blogs, Insurance Coverage

Chandler v. Concord Group Ins. Co., No. 2015-236 2015 WL 6395320 (Oct. 2015). Plaintiff/Insured Charles Chandler (“Chandler”) sought coverage under a liability policy issued by Concord Group Insurance Company (“Concord”) for injuries Chandler’s then-girlfriend, now-wife, allegedly sustained when she visited him and fell on the stairs. Chandler failed to report the incident for several months, refused to be interviewed, prohibited investigators from accessing the premises, staged photographs, interfered with discovery and depositions, and ultimately admitted liability and stipulated to a judgment without Concord’s assent. Vermont’s highest court affirmed the trial court’s dismissal of Chandler’s claims, holding that Concord’s conduct in admitting liability and entering a settlement without Concord’s assent, before Concord had an opportunity to complete its investigation and make a coverage determination, violated the cooperation provisions of the policy and relieved Concord of its obligations. It also held that the reasonableness of the settlement was irrelevant. The case confirmed that under Vermont law an insured forfeits coverage by failing to cooperate if the insurer establishes resulting prejudice – i.e., that the insurer has been placed in a “substantially less favorable position than it would have been if the insured had fully cooperated.”