Colorado’s Cooperation Legislation, enshrined in C.R.S. § 10-3-1118, was designed to guard policyholders from unfair denials primarily based on alleged failures to cooperate. It units a transparent authorized commonplace: If an insurer needs to depend on a non-cooperation protection, it should first comply with a sequence of procedural steps, together with sending formal written discover, giving the insured time to reply, and permitting a chance to remedy any alleged deficiencies. Failure to adjust to these statutory mandates means the insurer can’t use non-cooperation as a protection.
Jon Bukowski wrote a wonderful article about this regulation after its passage in Forfeiture of Advantages For Failure To Cooperate Stopped Underneath New Colorado Legislation.
In Simchat Torah Beit Midrash v. Philadelphia Indemnity Insurance coverage Firm, this statutory safeguard grew to become a focus of pre-trial litigation. Simchat, a nonprofit non secular group, suffered in depth property harm after a historic windstorm. When it sought protection from its insurer, it encountered resistance. The insurance coverage firm argued that Simchat had hindered its investigation by refusing extra inspections, successfully failing to cooperate with the claims course of. Nevertheless, Colorado regulation doesn’t allow insurers to easily declare non-cooperation and deny protection—their obligations beneath the Code are strict, and on this case, the court docket discovered that Philadelphia Indemnity had failed to satisfy them.
In granting Simchat’s movement, 1 the court docket dominated that the insurer was barred from arguing non-cooperation at trial. The choice relied closely on Colorado precedent, which strengthened the requirement that insurers strictly adhere to the statutory course of earlier than invoking a non-cooperation protection. The court docket discovered that Philadelphia Indemnity had not offered correct discover, nor had it given Simchat the required alternative to remedy any alleged failure. Because of this, the insurer’s key protection was eradicated earlier than the trial even started—a major authorized victory for the policyholder.
So, what occurred with the case? This week, the trial went to the jury. The power of the Code was not sufficient to safe a win. Regardless of the insurer’s procedural failure, the jury finally sided with Philadelphia Indemnity, delivering a zero verdict. This consequence raises vital questions in regards to the sensible affect of Colorado’s cooperation code. Whereas the statute offers essential protections to insured events, stopping insurers from unfairly leveraging cooperation clauses to disclaim claims, it doesn’t assure a good jury verdict.
The takeaway? Profitable a procedural battle over Colorado’s cooperation regulation doesn’t guarantee success in an insurance coverage dispute. Policyholders should nonetheless current compelling proof that their declare was wrongfully denied, and insurers, even when stripped of sure defenses, can nonetheless prevail in entrance of a jury. Colorado’s statutory safeguards present important due course of protections, however as this case illustrates, policyholders nonetheless must show the remainder of the case.
Thought For The Day
“You may’t win all of them, however you possibly can strive.”
—Babe Ruth
1 Simchat Torah Beit Midrash v. Philadelphia Indemnity Ins. Co., No. 1:23-cv-00594 (D. Colo. Mar. 3, 2025).
