Illinois Insurance Attorney Looks at How A Lengthy Delay in Providing Notice is Not Always an Absolute Bar to Coverage
The issue in this case is whether the insured violated its liability insurance policy by failing to give timely written notice to the insurer as specified in the policy.
A notice provision in an insurance policy is a provision which requires the insured to give written notice of the claim or lawsuit as soon as practicable. The provision imposes a prerequisite to insurance coverage. Courts have held that “as soon as practicable” means within a reasonable time and should also be determined based upon the facts and circumstances of each case. If an insured party does not provide reasonable notice under the clause, there is no right to recovery under the policy. The timeliness of the notice is a question for the jury, however the following factors are often considered: specific language of the policy’s notice provision, insured’s sophistication in commerce and insurance matters, insured’s awareness of an event that may trigger coverage, insured’s diligence in determining whether coverage is available, and prejudice to the insurer. Additionally, the court noted that an insured’s reasonable belief that the policy does not provide coverage may be an acceptable excuse for failing to give timely notice.
Upon the insurance agent telling the insured that the claim was probably not covered under the insurance policy, the insured did not send notice of the claim to the insurance company. The court stated that a reasonable prudent person in the same position of the insured would not have continued to pursue coverage under the policy after being informed by an agent that there was no coverage available. Further, the court determined that actual notice was given early enough to not prejudice the insurer. Since actual notice was given within a few months of the lawsuit being filed and two years before trial, there was no prejudice.
The court weighed the factors and determined that written notice was given within a reasonable time and did not violate the notice provision.
