Delay in Notification Justified Refusal to Defend and Indemnify

The Second Department determined the failure of one insurance company, Fage, to notify another insurance company, Utica, of an automobile accident until 2 ½ years after the accident justified Utica’s refusal to defend and indemnify Fage under the commercial liability umbrella policy issued by Utica to Fage:

The umbrella policy requires Fage to notify Utica of an occurrence or suit as soon as practicable. Such a requirement is a condition precedent to coverage … . Where an insurance policy requires that notice of an occurrence be given as soon as practicable, notice must be given within a reasonable time in view of all of the circumstances … . Absent a valid excuse, the failure to satisfy the notice requirement of an insurance policy vitiates coverage … .

Here, no notice was given to Utica by Fage until more than 2½ years after the subject accident and more than 2 years after the underlying action was commenced. This was an unreasonable delay … . Fage has provided no evidence of circumstances, such as lack of knowledge of the accident or a reasonable belief in nonliability, to excuse its delay … . Although Fage claims that its counsel was not aware of the existence of the umbrella policy until October 2009, such unawareness is not a valid excuse for the failure to provide Utica with timely notice … .  Ortiz v Fage USA Corp, 2012 NY Slip Op 02229, 2012-00469, Index Nos 22944/07, 23217/10, 2nd Dept 4-3-13