PROMPTLY NOTIFYING YOUR INSURER OF A CLAIM MATTERS

Posted on November 8, 2025November 8, 2025 by David Adelstein

Does promptly notifying your insurer of a claim matter? A recent case out of the 11^th Circuit Court of Appeals answers this question in the affirmative. MAKE SURE TO PROMPTLY NOTIFY YOUR INSURER OF A POTENTIAL CLAIM.

In L. Squared Industries, Inc. v. Nautilus Ins. Co., 31 Fla.L.Weekly C529a (11^th Cir. 2025), an insured owned gas stations and had a claims-made storage tank liability insurance policy. The policy provided: “You must see to it that we are notified as soon as reasonably possible, but in any event, not more than seven (7) days after the insured first became aware of, or should have become aware of a pollution condition which may result in a claim or any action or proceeding to impose an obligation on the insured for cleanup costs . . . .”

In May 2017, Florida’s Department of Environmental Protection (FDEP) inspected the insured’s gas station finding that components of an underground storage tank system were damaged and needed to be replaced. FDEP explained that testing needed to be performed to determine if a discharge occurred. Testing was performed that indicated a discharge occurred and that the gas station owner needed to have additional testing to determine the extent of contamination. Then, in June 2018, the gas station owner hired an environmental consulting firm to conduct certain assessments in connection with work at the gas station and the consulting firm discovered groundwater contamination around August 2018. The gas station owner, however, did not notify it liability insurer until April 2019 and the insurer denied the claim with a basis of denial being untimely notice. In a coverage lawsuit, the trial court granted summary judgment in favor of the insurer finding that the gas station owner was not entitled to coverage because it failed to notify its insurer within 7 days of becoming aware of the pollution condition as required by the insurance policy.

On appeal, the 11^th Circuit Court of Appeals affirmed the trial court with this important analysis demonstrating that it always makes sense to PROMPTLY notify your insurer of a potential claim:

We recognize that there are no Florida cases directly addressing whether the notice-prejudice rule applies in a case where the insured provides notice during the coverage period of a claims-made policy but fails to provide that notice within a specified period of time. Where there is an absence of state-law precedent in a diversity case like this one, we “presume that [the state] courts would adopt the majority view on a legal issue in the absence of indications to the contrary.” Given the authorities cited above, we must presume that Florida courts would adopt and apply the notice-prejudice rule in a case like this one and therefore apply the notice-prejudice rule here.

Although Florida courts have not addressed whether they would adopt the notice-prejudice rule in this context, they have addressed the more general issue of what presumptions apply when an insured breaches a notice provision. In Florida, “[i]f the insured breaches the notice provision [of the policy], prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.” This rule applies “to claims under a [personal injury protection] policy just as well as to claims under other policies.” Under Macias, then, [the insured gas station owner] had the burden at summary judgment to present sufficient evidence to create an issue of fact as to whether [its insurer] was prejudiced by its breach of the seven-day notice provision. Yet, as the district court explained, [the insured] did not present “specific arguments to rebut the presumption of prejudice” until it filed its motion for reconsideration of the summary judgment order. And even then, it did so “without citing to the record.”

On this record, [the insured] did not do enough to rebut the presumption of prejudice provided by Florida law and create an issue of fact for the jury. First, a losing party cannot use a motion for reconsideration to “raise [an] argument or present evidence that could have been raised prior to the entry of judgment.” Second, the district court was under no obligation to search the record for evidence which might create an issue of fact as to prejudice. And [the insured’s]citations to the record in its appellate brief come too late.

In sum, the district court correctly granted summary judgment to [the insurer] based on [the insured’s] breach of the seven-day notice provision because [the insured] did not rebut the presumption of prejudice to [the insurer] under Florida law. Therefore, we affirm the entry of summary judgment in favor of [the insurer] based on [the insured’s] breach of the seven-day notice provision.

Squared Industries, supra, (internal citations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

PROVIDING YOUR INSURER PROMPT NOTICE

Posted on April 28, 2024April 28, 2024 by David Adelstein

Sometimes, when it comes to insurance, you may hear the argument that you breached your insurance policy by failing to provide your insurer with prompt notice as the insurance policy requires. Well, this is not such an absolute issue. With that said, you should absolutely provide your insurer with prompt notice of a claim or loss. No legitimate reason not to. But, if you don’t, it is not an absolute get out of jail free card for your insurer, but it does give them a good argument, which you don’t really want to deal with.

In Gulfpoint Construction Co., Inc. v. Westfield Ins. Co., 2024 WL 1759228 (11^th Cir. 2024), an insured appealed a trial court’s ruling that found it did not provide prompt notice to its property insurer as the policy required. In this case, notice was provided two years after a loss from a hurricane. The insurer denied coverage and, in doing so, relied on the insured’s failure to provide prompt notice. Although the trial court agreed, the appellate court found this was a genuine issue of material fact.

“A notice of damage is” often, and is here, “a pre-condition to a claim.” “If an insured breaches the notice provision” of an insurance policy, “prejudice to the insurer will be presumed, but [that presumption] may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.” “Whether the presumption of prejudice to the insurer has been overcome is ordinarily” a question of fact, so, to grant summary judgment, the record must “conclusively foreclose the insured’s ability to overcome the presumption of prejudice. So, for example, in Shapiro v. First Protective Insurance Company, a Florida court found that whether the insureds had overcome the presumption was a fact question because their engineer, “based on his inspection, opined not only that the homeowners’ roof more likely than not had been damaged as a direct result of Hurricane Irma in 2017, but also that this damage still could be observed as late as 2022, five years after Hurricane Irma.” Conversely, in De La Rosa, “the record foreclose[d] the insured’s ability to overcome the prejudice to the insurer in evaluating the extent of the damage because of the delay in making the claim” because the insurer “would not be able to determine the damage at the time of the incident.” De La Rosa distinguished Stark on the ground that “even though there may be disputed issues of fact as to whether the insurer was prejudiced in determining the cause of the loss, the facts … show[ed] that the insurer would be prejudiced by the passage of time in investigating the extent of the loss, and thus, the cost of repair.”

Gulfpoint Construction Co., supra at *5 (internal citations omitted).

Here, the insured had evidence to rebut the insurer’s prejudice argument to make the issue of whether the insured breached the insurance policy by its failure to provide prompt notice a question of fact:

[The insured’s] expert testified that he “was able to formulate [his] opinions” despite reviewing the damage years after the fact, “and was in no way prejudiced by the timing of [the] inspection”—to the contrary, he said, “no other windstorm event occurred at [the property’s] location between the time of Hurricane Irma and [his inspection] which could have resulted in the damage observed to the [Gulfpoint’s] Building and its roof system.”

Indeed, [the insurer’s] own expert, Shatto, made clear that his investigation was not prejudiced by the passage of time. Asked to explain “how having to inspect that damage almost two years after Irma negatively impacted or limited [his] ability to” determine “the cause of any portion of the damage or rule out other potential competing causes of the same damage,” Shatto said this:

if I were to inspect that roof—if I had inspected that roof hand in hand with the Crowther Roof people [who conducted the inspection and repairs days after the hurricane], my report would have been identical …. I would have found the same partially formed cracks …. my report wouldn’t have changed.

Thus, as in Shapiro, there is plainly evidence from which a jury could infer that [the insurer] did not suffer prejudice in its investigation because of [the insured’s] delay in notifying them.

Gulfpoint Construction Co., supra at *6 (internal citations omitted).

While in this case, the insured lives another day by allowing this to be decided by the trier of fact–the jury–this is an issue that can be taken off the table by merely providing PROMPT NOTICE to your insurer.

NOTIFICATION TO INSURER AND THE “UNTIMELY NOTICE” FIGHT

Posted on July 2, 2022July 2, 2022 by Edward Garber

Notice, notice, notice. This should be your mindset when it comes to notifying your insurance carrier of a potential claim or loss. I get it. Notice means opening up a claim number and the potential increase in insurance premiums. Yet, untimely notice could mean fighting with your insurance carrier as to whether you provided them prompt notice. Thus, I operate with the “notice, notice, notice” mindset in providing notice of a potential claim or loss that could trigger duties or obligations under the policy. It is the better safe than sorry approach and avoids the needless notice fight.

The property insurance opinion in SFR Services, LLC v. Hartford Insurance Company of the Midwest, 2022 WL 2340519 (S.D.Fla. 2022) illustrates this “untimely notice” fight and, importantly, how certain policy language can change the dynamics of this fight. Here, notification of a hurricane roof damage claim was provided by the insured to the property insurer almost three years after the hurricane. In the interim, the insured had their roof repaired on multiple occasions. Finally, the insured notified the property insurer and the claim was denied. The insured sued the property insurer for coverage and the insurer moved for summary judgment arguing the insured failed to provide it timely notice as required by the policy.

“[N]otice is a condition precedent to coverage, and an insured’s failure to provide ‘timely notice of loss in contravention of a policy provision is a legal basis for the denial of recovery under the policy.” SFR Services, supra, at *2 (citation omitted).

However, just because an insurer claims it did not receive timely notice does not end the discussion. There is a two-step process. “First, the Court must determine ‘whether the insured provided timely notice.’ Second, ‘if notice was untimely, prejudice to the insurer is presumed, but that presumption may be rebutted.’” SFR Services, supra, at *2 (citations omitted).

Step 1- Whether the Insured Provided Timely Notice

Whether the insured provided timely notice employs a reasonable person standard. “[N]otice is necessary when there has been an occurrence that should lead a reasonable and prudent man to believe that a claim for damages would arise.” SFR Services, supra (citation omitted).

Step 2- If Notice is Untimely and Prejudice is Presumed, that Presumption may be Rebutted

If notice is untimely, prejudice is presumed; but, this presumption may be rebutted by the insured.

To carry this burden, an insured must show that the insurer was able to inspect the property in the same condition it was in right after the loss by presenting evidence creating a genuine dispute of fact as to ‘(a) whether better conclusions could have been drawn without the delay in providing notice, (b) whether those conclusions could have been drawn more easily, (c) whether the repairs to the affected areas that took place in the interim would complicate and evaluation of the extent of the damage or the insured’s efforts to mitigate its damages, or (d) whether an investigation conducted immediately following the occurrence would not have disclosed anything materially different from that disclosed by the delayed investigation.’”

SFR Services, supra, at *3 (citations omitted).

The Twist

But in this case, there is a twist. And it is a crucial twist to this two-step process.

The Court looked at language in the property insurance policy that provided the insurer had “no duty to provide coverage under this policy if the [Insureds’] failure to comply” with their duties “is prejudicial to [Defendant].” SFR Services, supra.

The insured argued that this policy language removes the presumption of prejudice in favor of the insurer and shifts the burden on the insurer to PROVE prejudice, i.e., that the insured’s failure to comply is prejudicial to the insurer. There is a huge difference between prejudice being presumed because of untimely notice (which has to be rebutted by the insured) and the insurer required to prove the prejudice. The Court found that under this language in the policy, the insurer is actually required to show prejudice:

Upon careful consideration, the Court must reject the body of precedent within this district that a presumption of prejudice may arise when a policy provision requires that an insured’s failure to comply with an enumerated duty be prejudicial to the insurer. Because there is no presumption of prejudice, a genuine issue of material fact remains as to whether the Insureds’ failure to timely notify Defendant was prejudicial, and the Motion must be denied. To hold otherwise would create a regime under which an insurer may obtain a different result in federal court than that required by the new line of cases in Florida state court.

SFR Services, supra.

This “twist” changes the dynamic of the “untimely notice” fight all due to policy language that basically says that the insurer has no coverage obligations if the insured’s failure to comply with his/her/its duties is prejudicial to the insurer. The Court’s ruling is ultimately saying that the insurer cannot hide behind the presumption of prejudice requiring the insured to rebut the prejudice because the policy, itself, puts that burden on the insurer. Big difference.