At A Glance
Summary: New York’s Appellate Division, First Department, addressed two common insurance coverage issues: timely notice of a claim and timely notice of a lawsuit.
In Hartford Fire Ins. Co. v Hudson Excess Ins. Co., Mayer Malbin Realty I, LLC sought additional insured coverage from Hudson Excess Insurance Company under an insurance policy issued to TS Group, a subcontractor working on a construction project.
The underlying claim concerned a TS Group employee who fell from a ladder while working at Mayer’s premises.
Court: Appellate Division, First Department
Decision Date: May 29, 2025
Case: Hartford Fire Ins. Co. v Hudson Excess Ins. Co., 238 AD3d 667 (1st Dept 2025)
Topic: Insurance Law § 3420, Timely Notice of Claim and Lawsuit
What Happened
The following timeline summarizes Mayer’s notification to Hudson about the underlying accident:
- September 20, 2017: The accident occurs.
- October 2017: The underlying plaintiff initiates a lawsuit against Mayer.
- October 2017: Mayer learns about the potential coverage through Hudson.
- March 2018: Mayer files third-party claims against TS Group, a subcontractor working on the construction site and the plaintiff’s employer.
- May 2020: Mayer provides notice to Hudson, over two years after discovering potential coverage.
- May 2020: Hudson disclaimed coverage “at this time,” on the grounds that Mayer was not an additional insured and that the late notice constituted a material breach of the policy.
The plaintiffs were Mayer Malbin Realty I, LLC, the premises owner, and Hartford Fire Insurance Co., Mayer’s insurer.
The Decision:
The First Department held that Hudson Excess Insurance Company had no duty to defend, indemnify, or provide coverage to the plaintiff premises owner, Mayer.
The Court focused on the more than two-year delay in providing notice to Hudson. Because notice was given more than two years after it was practical to do so, Insurance Law § 3420 shifted the burden to the plaintiffs to show that Hudson was not prejudiced by the delay.
The Court found that plaintiffs failed to meet that burden. It was not enough to say that Mayer had defended the underlying personal injury action “vigorously.” Hudson had lost the opportunity to conduct its own timely investigation, including inspecting the accident site, locating and inspecting the ladder, and interviewing witnesses while memories were fresh.
The Court also noted that Mayer’s counsel had not located, interviewed, or deposed witnesses from TS Group (the injured worker’s employer), including its owner and foreman. By the time Hudson received notice, the note of issue had already been filed, meaning Hudson no longer had a meaningful ability to obtain that discovery itself.
The First Department also rejected the argument that Hudson was not prejudiced because it had initially raised an alternative basis for disclaimer: that Mayer had not established additional insured status. The Court found that Hudson preserved its position because it had requested the subcontract and additional information. Once Hudson later received the subcontract showing additional insured status, it did not continue to rely on that ground.
From A Claims Perspective:
This decision is a reminder that identifying and tendering to potential additional insured carriers early is not just a coverage housekeeping issue. Where notice is delayed for years, and the insurer loses the ability to inspect the site, locate equipment, and interview key witnesses, the late notice can defeat the duty to defend even if the party ultimately qualifies as an additional insured.
For claims adjusters, the lesson is simple: once a subcontractor, vendor, tenant, owner, or upstream/downstream contracting party is identified, coverage investigation and tender should happen immediately.
Why This Matters:
1. Late notice can defeat coverage even when additional insured status exists.
This decision makes clear that qualifying as an additional insured does not rescue a late tender where the delay prejudices the insurer’s ability to investigate and defend.
2. A “vigorous defense” by another carrier is not enough.
The insured or tendering carrier must show that the late-noticed insurer was not prejudiced. The fact that the underlying case was actively defended does not automatically satisfy that burden.
3. Prejudice is strongest when the insurer loses access to key evidence.
The inability to inspect the accident site, examine the ladder, interview witnesses, and conduct discovery before the note of issue can establish meaningful prejudice.
Practice Pointers:
Claims adjusters and defense counsel should treat this decision as a checklist for early coverage action:
- Identify all contracts, subcontracts, purchase orders, leases, and insurance procurement provisions as soon as the claim is received.
- Immediately request certificates of insurance, policy copies, endorsements, and the operative subcontract or agreement.
- Tender early to all potentially implicated insurers, even if additional insured status has not been fully confirmed.
- Document when the claim was first received, when the potential additional insured relationship was discovered, and when tender was made.
- Do not wait until discovery is closed, the note of issue is filed, or trial is approaching before tendering to another insurer.
- When opposing a late-notice disclaimer, be prepared to prove lack of prejudice with specific facts, not general statements that the underlying defense was active.
- When issuing a disclaimer, preserve alternative coverage positions while requesting missing documents needed to evaluate additional insured status.
For deeper appellate-level coverage analysis and practical claims-handling guidance, follow New York Civil Law.
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If this analysis affects a claim file, coverage position, or motion strategy, forward it to the person handling the issue.
Read more analysis from New York Civil Law here.
Questions This Case Answers:
- Can an additional insured lose coverage because of late notice?
- When does the burden shift to the insured to prove lack of prejudice under Insurance Law § 3420?
- Is it enough to show that the underlying case was defended vigorously by another insurer to oppose an insurer’s claim of prejudice under Insurance Law § 3420?
- Can an insurer establish prejudice where late notice prevented inspection of the accident site and equipment?
- Does a late-noticed insurer have to provide a defense when the note of issue was already filed before tender?
- Can an insurer preserve an additional-insured coverage defense while requesting the subcontract or other missing coverage documents?
- Does an insurer waive a late-notice disclaimer by also questioning additional insured status?
- What evidence matters in proving prejudice from delayed notice in a New York additional insured coverage dispute?
Matthew Lerner is a New York civil litigation and appellate attorney at Gerber Ciano Kelly Brady LLP and the publisher of New York Civil Law. He writes about New York appellate decisions, insurance coverage, Labor Law, and litigation strategy for claims professionals and trial attorneys.
Authority:
The Court relied primarily on Insurance Law § 3420(c)(2)(A)(ii), which addresses prejudice in late-notice coverage disputes. Because notice was provided more than two years after it was practical to give notice, the burden shifted to the insureds or tendering parties to prove that Hudson was not prejudiced.
The First Department also relied on recent authority recognizing that late notice may prejudice an insurer where the delay prevents timely site inspection, inspection of instrumentalities involved in the accident, witness interviews, and meaningful participation in discovery. The Court distinguished cases where discovery remained open when the insurer received notice.
Sources:
Insurance Law § 3420(c)(2)(A)(ii)
244 Madison Realty Corp. v Utica First Ins. Co., 233 AD3d 506 (1st Dept 2024)
Salvo v Greater N.Y. Mut. Ins. Co., 213 AD3d 587 (1st Dept 2023)
Related Topics:
Additional insured coverage, late notice disclaimer, New York Insurance Law § 3420, excess insurance, duty to defend, duty to indemnify, tender of defense, prejudice from late notice, subcontractor insurance, owner additional insured coverage, coverage litigation, declaratory judgment action.
Photo Credit to Jade Koroliuk