Late Tender Rule Applies in Contribution Action
Under the late tender rule in Washington, an insurance company must prove it was substantially prejudiced by late notice before its obligations to the insured are excused.
This construction defect case applies the late tender rule to a dispute between carriers. The case arose from a condo defect case where the insured had three carriers. Two carriers settled with the insured, received an assignment of the insured's claims against non-settling entities and then brought a contribution action against the third carrier.
Division 1 held that two settling carriers now stood in the shoes of the insured and were thereby protected by the late tender rule. The trial court, by contrast, had held that the insured's selective choice not to tender the suit to the third carrier in itself barred the contribution claim by the other two carriers.