In 2008, when New York State, by statute, adopted the notice prejudice rule, which requires an insurer to demonstrate prejudice in order to deny coverage based on late notice of claim, New York left behind a body of case law that had up until then strictly construed an insured’s timely notice obligations.1 In doing so, New York joined the vast majority of states that, whether by case law or statute, have constrained insurers from disclaiming on a late notice basis that is sometimes viewed as a technicality, and required insurers to show that the late notice actually impaired the insurer’s ability to defend or adjust the claim.
While not always expressly stated, it has been generally understood that, where adopted, the notice prejudice rule applies to notices of claim submitted under occurrence policies but not to notices of claim submitted under claims-made policies. The distinction is based on the nature of the risk covered by these policies. An occurrence policy provides coverage for loss from accidents and occurrences that take place during the policy period, regardless of when the claim against the insured is actually made. The timely notice obligation is merely a condition to coverage—it is the occurrence that triggers the insurer’s coverage obligations under the policy.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
