A United States District Court ruled an insurer owes no coverage after an insured gave notice forty-six days after a loss. The case is Glob. Approach, Inc. v. Scottsdale Ins. Co., 2026 U.S. Dist. LEXIS 120183 (S.D. Fla. 2026).
Background
Global Approach, Inc. had an insurance policy with Scottsdale Insurance Company for a rental property in Homestead, Florida, from September 20, 2020, through September 20, 2021. The policy required that Global Approach give prompt notice in the event of covered loss or damage.
On September 3, 2021, a plumbing malfunction damaged the property's bathroom. Global acknowledged that it was aware of the damage on the same day. Global, however, did not contact its insurer but hired a handyman to inspect the property, then retained IBC Construction and Florida Services to demolish and repair the bathroom.
Global reported the loss to Scottsdale Insurance Company on October 19, 2021, 46 days after the loss. The claim stated that there was water damage to the master bathroom but did not identify the cause.
On October 27, 2021, Scottsdale's independent adjuster visited the property to find that the bathroom was gutted, making it impossible to determine the original condition of the bathroom or the exact cause of loss. The contractors took no photographs, videos, or other evidence documenting the pre-demolition condition of the bathroom.
The independent adjuster's inspection produced an estimate of $8,204.40 actual cash value. Global's public adjuster submitted an estimate of $85,000, which Scottsdale refused to pay. Global sued for breach of contract, and Scottsdale moved for summary judgment, alleging that Global's notice was untimely.
Prompt Notice
The court stated that when assessing a prompt-notice provision, there is a two-step process. The first is to determine whether the insured provided timely notice, and the second is that if the notice was untimely, whether the insurer was prejudiced.
The policy didn't define "prompt," so the court looked to Florida law, where "there is no bright-line rule." Under Florida law, prompt has been interpreted to mean that "notice should be given with reasonable dispatch and within a reasonable time in view of all the facts and circumstances of the particular case." The relevant time period is when the insured is aware of the loss and not when the loss occurred.
Global argued the record was "void of any concrete indication" of when it first learned of the loss, but the court rejected that argument. Global's representative had stated in a deposition that Global received notice "probably on the same day."
The court noted that the exact date Global knew of the loss was beside the point, based on its actions afterward. After Global knew of the loss, it hired a handyman to investigate the property and start the demolition, all before filing a claim with Scottsdale. The court stated that no reasonable juror could find that Global gave notice to its insurer as soon as practicable.
Prejudice
The court then determined whether the untimely notice prejudiced the insurer. Under Florida law, when the insured gives late notice, there is a presumption of prejudice unless the insured proves the insurer wasn't harmed by the late notice.
Global argued that Scottsdale wasn't prejudiced because its retained causation expert was able to identify the cause of loss. He determined that the water damage was consistent with water that escaped from the toilet or its supply line, and that the damage resulted from long-term, repeated exposure rather than a single event.
In Yacht Club on the Intracoastal Condo. Ass'n v. Lexington Ins. Co., a United States Court of Appeals held that an insurer's ability to develop causation evidence after the fact does not offset the prejudice caused by a delayed investigation.
Similarly, the court found that Scottsdale's causation expert's ability to determine the cause of loss was not enough to prove the insurer was not prejudiced by the late notice. Because the bathroom was demolished without any photos or evidence, the insurer was not given the chance to conduct a thorough investigation. The court granted summary judgment in favor of the insurer.
Editor's Note
This case shows the importance of knowing the provisions of your insurance policy. The insured should have notified the insurer before starting demolition on the bathroom. Taking photo or video evidence also may have helped their position.
The court found that, under the facts and circumstances of this case, a notice 46 days after the loss was discovered was not prompt. The court did note that 46 days is not always too long a time period to be deemed not prompt, depending on the circumstances; other courts have interpreted "prompt" differently after a hurricane and other known events.
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Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.