In NJ, a carrier needs to show appreciable prejudice to disclaim coverage on late notice grounds. The standard is tough to meet and therefore few carriers press the issue. State National Insurance Company is about to prove the exception.

State National insures the County of Camden. The County was sued by a Mr. Anderson. Mr. Anderson, an 18 year old male, was driving in Camden County when his car went onto the roadway shoulder where there was a significant drop-off between the asphalt and the adjacent dirt and gravel. In the resulting collision, Anderson suffered significant injuries – so significant that a jury awarded him $15 million in past and future pain and suffering, disability and loss of enjoyment of life and $1.29 million in past medical costs.

The problem (from State’s perspective) was that Camden didn’t let State know about the
lawsuit until a year and a half into the litigation – after discovery had ended. The delay was a problem from State’s perspective because Camden had failed to retain any relevant expert witnesses – a failure that State alleges led directly to the verdict.

What happens next? Stay tuned to find out.