A recent decision from the Appellate Court of Illinois, in the matter between Monroy-Perez v. Sentry Select Insurance Co., 2025 IL App (1st) 241711, serves as a stark warning to insurers regarding the consequences of withholding policy information from insureds. The court held that an insurer may be estopped from raising coverage defences, including limitations defences, where its conduct—particularly silence or failure to provide requested policy documents—prejudices the insured.
Background
Monroy-Perez was injured in a motor vehicle accident on 5 September 2019, while riding in a truck owned by his employer. He was an insured under his employer's auto policy with Sentry Select Insurance Co. On 8 January 2020, the insured's attorney notified the insurer of the claim, specifically requesting, amongst others, confirmation of compliance with the policy's notice requirements and a certified copy of the policy. The insurer did not respond to these requests but continued to seek updates on the insured's medical condition and expenses.
Over the following years, the insured made repeated requests for a copy of the policy and for arbitration to proceed. It was not until 25 January 2023—over three years after the accident—that the insurer finally provided a copy of the policy. Shortly thereafter, the insured demanded arbitration and, after receiving no response, instituted legal action on 9 March 2023.
The policy contained a two-year suit limitation clause, requiring any legal action to be brought within two years of the accident, unless arbitration proceedings had commenced within that period. The policy allowed for arbitration if the parties could not agree on the amount of damages
Insurer's Arguments and Court's Reasoning
The insurer argued that both the arbitration demand and the legal action were outside the policy's two-year limitation. The court agreed that, on the face of the policy, the claims were time-barred. However, the court went further, holding that the insurer was estopped from asserting the limitations defence due to its own conduct.
Key to the court's reasoning was the insurer's failure to provide the policy or disclose the relevant limitations and arbitration provisions, despite multiple timely requests from the insured. The court found that, had the insurer provided the policy as requested, the insured would have been aware of the time limits and procedural requirements, and could have acted accordingly.
The court also found that the insurer's ongoing communications—seeking information and updates from the insured—could reasonably have led the insured to believe that his claim was being handled and that the limitations period had not expired. The insurer's silence and failure to clarify the requirements, despite being specifically asked to do so, amounted to "concealing the limitations period and the prerequisites for requesting arbitration".
Takeaway
The decision underscores that estoppel may arise not only from express misrepresentations, but also from silence or inaction where there is a duty to speak—an approach that accords with the legal position in South Africa, as confirmed in Aris Enterprises (Finance) v Protea Assurance Co Ltd 1981 (3) SA 274 (AD) at 291D–E. Silence, in the face of a duty to disclose, can be as misleading as an express statement. The insurer's withholding of the policy and failure to respond to direct requests for information was found to constitute conduct sufficient to estop it from raising the limitations defence.
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