10 N.Y.3d 635 (2008)
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When a workers’ compensation and employer’s liability insurance policy is underwritten and delivered in one state, and lists another state as an “other states” state, the policy’s coverage limits are enforceable even if an accident occurs in the “other states” state, unless the policy explicitly provides for unlimited coverage or the insurer is notified and agrees to provide coverage as if the policy was underwritten in that state.
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Summary
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This case concerns a dispute between two insurers over the extent of employer’s liability coverage. A New Jersey construction worker was injured in New York while working for a New Jersey subcontractor who had a policy with Preserver Insurance underwritten and delivered in New Jersey. The policy listed New York as an “other states” state but had a $100,000 limit on employer’s liability coverage. The New York Court of Appeals held that the $100,000 limit was enforceable, rejecting the argument that New York law required unlimited coverage because the policy was not underwritten in New York, and the insurer was never notified that work was taking place in New York, therefore, the policy was not required to be changed.
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Facts
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Arthur Ryba, a New Jersey construction worker, was injured at a New York job site.
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Ryba was employed by East Coast Stucco, a New Jersey subcontractor.
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East Coast Stucco had a workers’ compensation and employer’s liability policy with Preserver Insurance, a New Jersey company.
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The policy was underwritten and delivered in New Jersey.
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The policy listed New Jersey under Item 3.A (where the policy applies) and New York under Item 3.C (“other states” where the policy might apply if notified).
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Ryba sued the general contractor, Almeida, who then brought a third-party action against East Coast Stucco.
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Almeida claimed East Coast Stucco failed to procure promised liability insurance and sought common-law and contractual indemnification.
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Procedural History
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Preserver Insurance initiated a declaratory judgment action.
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Preserver sought a declaration that it had no duty to defend or indemnify East Coast Stucco beyond the $100,000 limit.
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Northern Assurance (Almeida’s insurer) argued Preserver was time-barred from disclaiming coverage under New York Insurance Law § 3420(d) and that the policy provided unlimited coverage.
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Supreme Court agreed with Northern, holding that § 3420(d) applied and the policy required unlimited coverage.
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The Appellate Division affirmed.
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The New York Court of Appeals reversed the lower courts’ decision and enforced the policy limits.r
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Issue(s)
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Whether New York Insurance Law § 3420(d) applies to a policy underwritten and delivered in New Jersey, merely because the policy covers risks in New York?
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Whether an employer’s liability insurance policy with a stated coverage limit provides unlimited coverage when an accident occurs in a state listed as an “other state” in the policy?r
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Holding
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No, because the policy was neither