When is it too late to give notice of a claim to the insurance company?

In West Bend Mutual Insurance Co. v. TRRS Corp., 2022 IL App (2d) 210506 (Sept. 9), the court held that notice 11 months after an injury might not be too late for a company to obtain coverage.

The general manager of the company knew that an employee injured his shoulder at work while operating a forklift. The employee filed a worker’s compensation claim in 2018 and brought suit against the company and two suppliers. The company then reported the worker’s compensation claim to the insurer and asked it to defend it in the lawsuit. The insurer won in the trial court, with the court holding that the general manager was sophisticated enough to know to submit the claim in 2017. But the appellate court held that the trial court has misapplied the factors necessary to decide the question:  (1) the policy language, (2) the insured’s sophistication in commerce and insurance matters, (3) the insured’s awareness of an event that may trigger coverage, (4) the insured’s diligence in ascertaining whether coverage was available, and (5) prejudice to the insurer from late notice.

In this case, the manager knew that the employee had suffered an earlier injury to his shoulder and claimed he wasn’t certain whether that would impact coverage, didn’t know whether the insurer covered the facility at which the employee was working, and while he had attended a risk management seminary seven years ago, he denied sophistication in coverage matters. If the company had access to primary and excess coverage, a coverage lawyer, or a general counsel, it might be deemed sophisticated, but no facts bearing on those questions were in the record, so the appellate court remanded the case to the trial court for further proceedings. For a copy of the case or to consult with an attorney about whether your insurance policy covers a claim, get in touch with Tom Patterson at tpatterson@pattersonlawfirm.com or 312-750-1822

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