In New York, an insurance claim made to an excess insurer is generally required when an insured reasonably should have been aware that the claim would exceed primary coverage and trigger excess coverage. Recently, in Martin Associates, Inc. v. Illinois Natl. Ins. Co., , the First Department had to determine at what point the notice obligation was triggered. The excess policy issued by Illinois National had effective dates of June 30, 2005 to June 30, 2006 and the underlying accident took place in October 2005 when a worker sustained serious injuries to his neck, back and shoulder when a metal brace fell on him while he was performing construction work.

The First Department found that the discovery provided to Martin’s insurance broker and its attorneys between October 2006 and March 2011 suggested a reasonable possibility that the underlying personal injury action would exceed Martin’s $1 million primary coverage, triggering Martin’s obligation to notify its excess insurer, Illinois National. But  notice was not provided to Illinois National.

As a matter of law, the Court found that the information in its attorneys’ possession was imputed to Martin. Furthermore, Martin received the notice of claim against co-defendant Dormitory Authority in April 2006 and the summons and complaint in August 2006, both of which were forwarded to its broker; but it failed to provide notice to Illinois National or take other steps to insure that Illinois National received notice. As a result, Martin’s notice to Illinois National in November 2011 was untimely as a matter of law.

Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information.