In 244 Madison Realty Corp. v. Utica First Ins. Co., 233 A.D.3d 506, 221 N.Y.S.3d 527 (2024), Farber Brocks & Zane, LLP successfully represented its insurance carrier client in a critical insurance coverage dispute regarding late notice of a claim. The case involved a commercial property owner, which failed to notify the carrier of its claim for additional insured coverage for almost two and a half years after a lawsuit was filed against it.
The court ruled that the carrier had properly disclaimed coverage based on the additional insured’s failure to provide timely notice, which is a condition precedent to coverage under the policy. The court further emphasized that the delay of over two years placed the burden on the insured to prove that the insurer had not been prejudiced by the late notice. In this case, the insured failed to meet that burden, and as a result, the court upheld the disclaimer of coverage.
This decision is significant not only for its reinforcement of the importance of adhering to timely notice provisions but also for its rarely discussed aspect: the shifting burden of proof in late notice defenses. The court’s ruling highlighted that when the notice is delayed in excess of two years, the burden shifts to the insured to prove that the delay did not prejudice the insurer. This rarely considered principle has real-world implications, especially in cases where delayed notice can complicate an insurer’s ability to investigate or defend against a claim. In this case, the insured’s failure to meet this burden led to the court’s decision in favor of Farber Brocks & Zane LLP’s insurance carrier client. Farber Brocks & Zane’s deep expertise in handling complex insurance coverage matters played a pivotal role in navigating this nuanced issue, ultimately securing a favorable outcome for its client.