Originally posted on February 27, 2012 by Ryan
Sheehan Constr. Co. v. Continental Casualty Co., 938 N.E. 2d 685 (Dec. 2010).
A contractor failed to provide its CGL insurance company with notice of claims against it for over two years. The underlying claims were based on construction defects by the contractor’s subs. The insurance company refused to tender coverage based on prejudice for the untimely notice. The court sided with the carrier and held that although the underlying claims may have warranted coverage by the carrier, failure to provide timely notice was fatal to the contractor. There was no need for the carrier to prove it was actually harmed because the contractor’s failure to notify allows the presumption of presumption of prejudice to arise in favor of the insurance company. That presumption then must be rebutted by the contractor (insured). Because the contractor failed to set forth any evidence that its failure to provide notice did not prejudice the carrier, the court held that the denial of coverage was appropriate.
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