Judge Holds Bad Address in Policy No Bar to Insurance Cancellation

By Don R. Sampen, published, Chicago Daily Law Bulletin, September 1, 2026

The U.S. District Court for the Northern District of Illinois recently held that a cancellation notice for a commercial property insurance policy was effective despite the fact the notice was not sent to the insured’s address.

The case is Ategrity Specialty Insurance Co. v. Qwikx One Convenience Store, Inc., No. 24 C 11535, (N.D. Ill., July 31). The insurer, Ategrity, was represented by Hinshaw & Culbertson LLP of Chicago. David J. Roe of Mount Prospect represented the insured, Qwikx.

The insured obtained a commercial property policy from Ategrity, a surplus lines insurer, for a Carpentersville liquor store in November 2023. The address for the store premises as shown on the coverage application was 222 W. Main St. in Carpentersville, but the mailing address was shown at a different location. The policy as issued, however, listed the mailing address as 222 W. Main St. in Barrington, not Carpentersville.

In December 2023, Ategrity ordered an inspection of the property and as a result recommended certain modifications. An agent for Ategrity sent the inspection report to the insured’s broker, along with a notice that the modifications had to be made within 30 days or the policy would be canceled.

On Jan. 23, 2024, Ategrity’s agent sent a notice of cancellation effective Feb. 26, 2024, for failure to implement the inspection recommendations. The notice, however, was sent to the Barrington address rather than to the Carpentersville address. The Ategrity agent nonetheless also sent a copy of the notice to the insured’s broker at the same time and on two occasions thereafter.

In March 2024, the broker sent the insured a copy of the cancellation notice and also forwarded to the insured the prorated, unused portion of the one-year policy premium. The insured deposited the refund.

A fire destroyed the liquor store in May 2024, and the insured reported the loss to Ategrity. Prior to then, the insured had not made any attempt to rescind the cancellation. As a result, Ategrity responded that the fire loss was not covered.

A few months later, Ategrity brought a declaratory judgment action for a determination that its cancellation was effective. The insured counterclaimed, asserting that Ategrity had failed to comply with the policy’s notice requirements.

Analysis

On cross-motions for summary judgment, U.S. District Judge Sharon Johnson Coleman found in favor of Ategrity. She initially addressed the insured’s argument regarding noncompliance with the policy’s notice requirements. The cancellation provision required that Ategrity give notice by mailing or delivering notice to the named insured’s “last mailing address known to” Ategrity.

The insured argued that its last known mailing address was its Carpentersville address as shown in its application. Coleman disagreed. She wrote that the last known mailing address known to Ategrity was the address shown in the policy. And even if that address was mistaken, that did not change the outcome since the insured was presumed to have known of the error because it had the opportunity to review the policy.

Apart from the address issue, the insured contended that the policy did not give Ategrity the right to cancel for its failure to comply with an inspection recommendation. The argument was based on the fact that, while the policy had a general cancellation provision allowing cancellation “for any other reason” upon 30 days’ notice, it also imposed different notice requirements allowing cancellation of certain coverage parts, such as for vacancy or failure to repair damage.

The insured argued that the “any other reason” language referred to the other specific reasons set forth elsewhere in the policy for cancellation of specific coverage parts, and compliance with inspection requirements was not one of them.

Coleman again disagreed. She found the fact that the cancellation provisions differentiated between canceling the “policy” as a whole and canceling particular coverage supported the view that the narrower provisions were not intended to limit the broad full-policy cancellation.

The court therefore ruled in favor of Ategrity that the policy cancellation had properly occurred prior to the fire.

Key Point

Provisions in an insurance policy requiring the insurer to send notice to the insured’s last mailing address known to the insurer refer generally to the insured’s address set forth in the policy. The insured, moreover, has the duty to review the policy and inform the insurer if that address is wrong.