Publications

Late Notice Law: Does the Insurer Need to Show Prejudice?

February 22, 2005
New York Law Journal

In a column one year ago, we discussed New York’s late notice law which traditionally holds that if an insured’s notice of a claim is late and there is no reasonable excuse for the delay, there is no coverage and the insurer need not make any showing that it was prejudiced in order to disclaim coverage.

This rule has been steadfastly applied by the Court of Appeals since its 1972 decision in Security Mutual Ins. Co. v. Acker-Fitzimons Corp. and repeatedly reiterated, most recently in the Court’s 1997 decision in American Home Assur. Co. v. International Ins. Co. The rule has also been consistently applied by the lower courts and intermediate appellate courts. On Dec. 21, 2004, however, the First Department departed from this longstanding authority. In a split decision contrary to the traditional rule, the First Department held that, in order to disclaim, an insurer was required to show prejudice based on the insured’s four-month delay in providing notice.