The law of late notice in New York is changing. Recently, in a major victory for New York insurance policyholders, a state trial court has required an insurance company to demonstrate that it was prejudiced by its policyholder’s untimely notice of claim before it could deny coverage on that basis. See St. Charles Hospital and Rehabilitation Center v. Royal Globe Insurance Company, et al., No. 29155-98 (April 28, 2004) (“St. Charles Hospital”).
Virtually all liability insurance policies require a policyholder to give its insurance company notice of a claim “as soon as practicable.” In New York, the failure of a policyholder to comply with this technicality, by even short periods of time, has operated in the past as a complete bar to coverage. See, e.g., Olin Corp. v. Ins. Co. of North Am., 743 F. Supp. 1044, 1053 (S.D.N.Y. 1990). Moreover, New York courts have long adhered to the "no-prejudice" exception, which allows an insurance company to deny coverage based on its policyholder’s late notice of claim without having to demonstrate that it was somehow prejudiced by the late notice.