Insurance Policy Rescission, Cancellation, and Nonrenewal of Commercial Property Insurance Policies

Summary

This practice note addresses key issues and best approaches to insurance policy rescission, cancellation, and nonrenewal, in the context of commercial property insurance. An understanding of the elements of rescission, the proper grounds for policy cancellation, and the appropriate timing and bases for policy nonrenewal are key to an insurer's avoiding bad faith exposure for depriving insureds from receiving policy benefits by mishandling a policy's rescission, cancellation, or nonrenewal. How insurance policy conditions allow insurers to rescind, cancel, or not renew coverage, and the impact of state-specific statutes on these issues are also addressed.