The Appellate Division, First Department, recently ruled that if the insurance company is to assert a late notice defense, it must do so as soon as reasonably practicable. The insurer cannot delay in asserting this defense until after it completes its investigation. See George Campbell Painting v. National Union Fire Ins. Co. of Pittsburgh, PA.
In this case the insurance company first asserted its defense of late notice many months after being notified. The the insurer issued a letter asserting the defense of late notice many months later and after it had completed its investigation. The court stated that this is too late, and this defense is deemed waived.
If you have a claim or lawsuit against you, be sure to notify your insurance company in writing as soon as possible. The policy obligates you to provide notice as soon as reasonably practicable. See Insurance Law sec. 3420.
If the insurance company does not assert the late notice defense promptly, it will not be able to disclaim coverage.
Therefore, after you have provided notice in writing look-out for any coverage letters or reservation of rights letters issued by your insurance carrier. This will determine if there will be a problem with insurance coverage later down the road.
If you have an insurance coverage problem, please feel free to contact me for a free consultation at either 800-531-1434 or firstname.lastname@example.org.
Mark E. Seitelman, 1/27/12, www.seitelman.com.