A reminder that New York law has changed as to late notice

In Tower Insurance Co. of N.Y. v. Miles (decided on June 1, 2010), the First Department reversed an order denying Tower's motion for summary judgment declaring that it no duty to defend or indemnify, holding that that "[b]ecause defendants were knowledgeable of facts that suggested a reasonable possibility of a claim against them and failed to conduct a sufficient inquiry into the circumstances, their five-month delay in notifying plaintiff of the incident was unreasonable as a matter of law."

Importantly, however, this incident obviously pre-dates the recent amendment to Insurance Law 3420. Effectve January 17, 2009, insurance companies are now required to show prejudice as a condition to denying coverage based on late notice if notice is provided within 2 years of the time it was due. If notice is provided more than 2 years after it was due, then the burden is on the insured to show a lack of prejudice. As amended, the statute only applies to policies issued on or after January 17, 2009.