Injured Party, as Well as the Insured Defendant, Has a Duty to Inform Insured’s Carrier of Incident; Failure of Timely Notice by Both the Insured and the Injured Party Allowed Carrier to Disclaim

In this case the insurer [Tower] disclaimed coverage because it was not given notice of the claim.  The Second Department determined that both the insured [Xu] and the injured party [Gomez] had a duty to inform the carrier of the incident:

The question before us is whether Tower may be required to afford coverage to its defaulting insured (Xu) for the benefit of the injured party (Gomez) pursuant to Insurance Law § 3420(a)(3). Gomez is not accountable, of course, for Xu’s failure to provide notice to Tower during the period of nearly a year and a half  … . Still, even though “[i]n determining the reasonableness of an injured party’s notice, the notice required is measured less rigidly than that required of the insureds” …, some level of diligence was required of Gomez, as the dissent reluctantly concedes, once his counsel, upon receipt of the certificate evidencing that coverage had been renewed five months after the incident, was put on notice of the likelihood (even if not a certainty) that Xu had been covered by a Tower policy at the time of the incident (see Kalthoff v Arrowood Indem. Co., 95 AD3d 1413, 1415 [3d Dept 2012] [where the insured has failed to comply with the notice conditions of the policy, “the injured party bears the burden of demonstrating that it made reasonable efforts to identify the insurer and provide it with prompt notice”] …). Tower Ins Co of NY v Rong Rong Sun, 2013 NY Slip Op 02645, 8777, 108391/10, 1st Dept, 4-18-13