{"id":895224,"date":"2018-11-21T11:31:36","date_gmt":"2018-11-21T18:31:36","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895224"},"modified":"2018-11-21T11:31:36","modified_gmt":"2018-11-21T18:31:36","slug":"construction-contractors-promptly-notify-insurers-potentially-covered-claim","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contractors-promptly-notify-insurers-potentially-covered-claim\/","title":{"rendered":"Construction Contractors Should Promptly Notify Insurers of a Potentially Covered Claim"},"content":{"rendered":"<p>Patrick Johnson | <a href=\"https:\/\/www.saul.com\/blogs\/construction-industry-counselor\/construction-contractors-should-promptly-notify-insurers\" target=\"_blank\" rel=\"noopener\">Construction Industry Counselor<\/a> | November 15, 2018<\/p>\n<p>Contractors always should put their insurers on notice of a potentially covered claim as soon as possible.\u00a0 In many states, an insured typically will not be denied coverage for the late notice of a claim if there is no prejudice to the insurer, however, there are circumstances under which late notice alone can bar coverage.\u00a0 A recent case before a New York appellate court demonstrates the importance of being aware that liability insurance policies subject to New York Insurance Law \u00a7 3420 law which were issued before January 17, 2009 are not subject to a requirement that an insurer may deny coverage for late notice of a claim only if the insurer was prejudiced by the late notice.\u00a0\u00a0 In\u00a0<em>\u00a0Lafarge Bldg. Materials Inc. v. Harleysville Ins. Co. of New York<\/em>, 2018 WL 5659750 (N.Y. App. Div. Nov. 1, 2018), the New York appellate court rejected a construction contractor\u2019s claim for coverage under an insurance policy due to late notice to its insurer.<\/p>\n<p>This case followed the injury of a subcontractor\u2019s employee at a construction site.\u00a0 The commercial general liability policy issued to the subcontractor required the subcontractor to name the general contractor as an additional insured.\u00a0 Subsequently, a personal injury action was commenced in March 2008.\u00a0 Nine months later, the general contractor\u00a0\u00a0 tendered to the defendant insurer a letter requesting coverage.\u00a0 The insurer declined to provide coverage on the grounds that the general contractor failed to provide notice &#8220;as soon as practicable&#8221; as required by the policy.\u00a0 The general contractor filed suit against the insurer to challenge the declination of coverage.\u00a0 The defendant insurer moved for summary judgment on the grounds that the notice was deficient and the New York Supreme Court, New York\u2019s trial level court, agreed.<\/p>\n<p>In the appeal that followed, the question before the New York appellate court was whether the general contractor\u2019s notice to its insurer was timely based on the policy language that notice be given &#8220;as soon as practicable.&#8221;\u00a0 The general contractor argued that it lacked knowledge as to whether it was covered under the policy, thus causing\u00a0 the delay.\u00a0 The appellate court disagreed, based on the fact that shortly after being served with the underlying personal injury complaint the plaintiff became aware of the occurrence and had in its possession the certificate of insurance outlining its status as an additional insured and identifying the insurer. The appellate court held that although the reasonableness of delay ordinarily presents questions of fact, the facts presented by the general contractor in support of the nine month delay were unreasonable as a matter of law as the insured failed to demonstrate that it lacked knowledge of the identity of the insurer and its additional insured status for over 8 months.<\/p>\n<p>The policy in this case was issued prior to the amendment of N.Y. Ins. Law \u00a7 3420, effective January 19, 2009. Most notably, the amendment requires that an insurer show that it was prejudiced by a failure to provide notice in order to successfully disclaim coverage.\u00a0 The appellate court held that the insurer was not required to show that it had been prejudiced by the untimely notice because the policy had been issued prior to the statutory amendment. Both construction companies and insurers are often faced with claims under policies that pre-date the amendment.\u00a0 Prejudice requirements vary by state. In some states whether prejudice is required can depend on the type of policy and when it was issued. As demonstrated in the\u00a0<em>Lafarge\u00a0<\/em>case, it is important, particularly with older policies, that construction companies promptly place their insurer on notice of potentially covered claims to avoid any coverage disputes based on late notice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Patrick Johnson | Construction Industry Counselor | November 15, 2018 Contractors always should put their insurers on notice of a potentially covered claim as soon as possible.\u00a0 In many states, an insured typically will not be denied coverage for the late notice of a claim if there is no prejudice to the insurer, however, there&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contractors-promptly-notify-insurers-potentially-covered-claim\/\">Continue reading <span class=\"screen-reader-text\">Construction Contractors Should Promptly Notify Insurers of a Potentially Covered Claim<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[9895,363,3],"class_list":["post-895224","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-advise-consult","tag-coverage-disputes","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Construction Contractors Should Promptly Notify Insurers of a Potentially Covered Claim - Advise &amp; 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