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When applied within the context of insurance coverage, the otherwise uncomplicated phrase “late notice” often elicits confusion and doubt. Indeed, the timely notice of claims is generally an express requirement of an insurance policy and fundamental to the efficient and predictable administration of claims. However, the modern trend by U.S. courts and legislatures has been to diminish “late notice” as a defense to coverage.

Specifically, numerous U.S. jurisdictions have moved away from strict enforcement of the requirement of timely notice — that is, failure to notify timely constitutes a forfeiture of coverage — to one that requires a showing of harm to the insurer before coverage is lost. Dubbed the “notice-prejudice” rule, the basic premise is that unless the insurer has been prejudiced by an insured’s late notice, coverage will not be forfeited. As explained in more detail below, recent litigation and legislation from around the country has bolstered this trend and further obscured the viability of a late notice defense.

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