At issue in Philadelphia Indem. Ins. Co. v Genesee Val. Improvement Corp., 2007 NY Slip Op 03389, was whether the defendant, GVIC, had failed to timely provide notice to its insured, the plaintiff, of an injured worker's Labor Law s. 200, 240(1) and 241(6) claims.
The worker was injured on September 24, 2001 and commenced suit against GVIC on June 4, 2002. On June 21, 2002, the plaintiff insurer received notice from the GVIC of the pending lawsuit. The insurer disclaimed based upon GVIC's 9 month delay in providing notice of the worker's accident.
The Fourth Department concluded that plaintiff insurer was not obligated to defend and indemnify GVIC since GVIC could not have reasonably believed that it was immune from potential liability.
In reaching its determination, the Court set forth the relevant law:
Although a good-faith belief in nonliability may excuse a failure to give timely notice...[a]t issue under the policy provision [in this case] is not whether [GVIC had] a good-faith belief in nonliability, but whether [it] should have anticipated a claim... [T]he insured's belief must be reasonable under all the circumstances, and it may be relevant on the issue of reasonableness, whether and to what extent, the insured has inquired into the circumstances of the accident or occurrence...
Ultimately, the determination turns on whether an ordinary prudent person could have reasonably believed himself to be immune from potential civil liability under the circumstances...(Internal citations and quotations omitted).
The Court then noted that GVIC was aware of the accident when it occurred, but failed to conduct an investigation. Accordingly, the Court held that GVIC's explanation for its failure to promptly notify its insurer of the accident due to its belief that other parties would bear ultimate responsibility for the worker's injuries was insufficient since the belief in immunity from liability was unreasonable as a matter of law.
These types of determinations are always very fact specific, but without fail, the lesson to be learned from each and every decision relating to late notice is that the safe practice is to notify your insurer of an accident, even if you think that you're not at fault. It's better to be safe than sorry.