Liability policies condition coverage on prompt notice of an occurrence, claim, or suit. The late notice defense asserts that the insured's delay breached that condition and relieves the insurer of its obligations.
Most jurisdictions have adopted the notice-prejudice rule, requiring the insurer to prove the delay actually impaired its ability to investigate or defend before coverage is forfeited.
Alternative Names:
Untimely Notice, Notice-Prejudice Defense
Why it Matters?
Late notice is one of the few defenses that operates independently of the underlying merits, which makes it valuable but also risky. A denial resting solely on delay without demonstrable prejudice is a common source of bad faith exposure, so the prejudice analysis needs to be documented with specifics such as lost evidence, unavailable witnesses, or foreclosed settlement opportunities.
Frequently Confused with
Related terms
Frequently asked questions
How late is too late?
Does the prejudice rule apply to claims-made policies?
