On February 14, 2023, the First Department issued a decision in Menlo Energy Fla., LLC v. Certain Underwriters at Lloyds London, 2023 NY Slip Op. 00817, holding that an insurance claim was barred because of the insured’s failure to give notice of the claim as soon as practicable, explaining:
The notice provision in an insurance policy “is a condition precedent to coverage and, absent a valid excuse, the failure to satisfy the notice requirement vitiates the policy. The notice provision at issue states:
It is a condition precedent to liability that in the event of loss or damage insured under this Policy the insured shall give notice of loss or damage to Underwriters hereon as soon thereafter as practicable, and in any event within sixty (60) days of the date of loss after which any claim shall become forfeit.
The provision stated in the conjunctive, and principles of contract interpretation preclude a court from adopting a construction of a policy that leaves a provision without force and effect. The policy therefore required the insured to satisfy two distinct conditions to satisfy its notice obligations: (i) to provide Underwriters with notice of the loss or damage as soon as practicable; and (ii) to provide Underwriters with notice within 60 days of the date of loss.
An insurance policy provision that requires the insured to provide notice as soon as practicable, like the provision at issue here, mandates that notice be given within a reasonable time under the circumstances. The insured knew, by July 25, 2013, that the vacuum blower at its plant was vibrating excessively and leaking oil internally from its seals, and that the loss of the vacuum blower would force the shutdown of all operations at the refinery for a significant period. Although the date notice was provided is disputed, whether looking at the earliest date (September 14, 2013) or the latest date (September 25, 2013), the insured’s notice was not as soon as practicable or reasonable. Prejudice is not an issue in this case, as Insurance Law § 3420, which requires liability insurers to demonstrate prejudice, applies only to claims for death and bodily injury.
(Internal quotations and citations omitted).