The Hudson Bridge in New York was being repaired. The Bridge and Tunnel Authority, the owner of the Hudson Bridge hired a general contractor to do the repairs. The general contractor hired a subcontractor. Under the subcontract, the subcontractor was supposed to obtain insurance in behalf of the bridge owner and the general contractor. The insurance policy of the subcontractor was supposed to cover all expenses for personal injury suits that may arise from the time that the subcontractor was doing repair work under the subcontract.
On August 11, 2003, a male employee of the subcontractor slipped and fell on a makeshift inclined ramp that led from the worksite to the temporary office also at the construction site. The employee of the subcontractor sustained serious spinal injury. His slip and fall resulted in herniated discs of his cervical and lumbar spine and an impinged nerve on the spine. The employee was confined to his home for one month after the accident. He was ordered to rest in bed for five months from September 2004 until February 2004. The employee needed spinal fusion surgery to fully recover from his injuries.
He filed a damage suit under common law negligence and under labor law. He sued the owner of the Hudson Bridge and the general contractor. The man did not include in his damage suit his own employer, the subcontractor. The man claimed for lost earnings and for future loss of earnings due to the spinal injury he sustained. No notice was given by any of the parties to the insurer of the subcontractor until two years had passed from the time that the suit was filed by the employee of the subcontractor.
Notice was finally given to the subcontractor’s excess insurer when the parties were negotiating a settlement of the employee’s claims. The employee agreed to settle his case in consideration of the payment of $5,500,000.00. The primary insurer of the owner of the Hudson Bridge and the owner, the primary insurer of the general contractor and the general contractor all pitched in to raise the amount to settle the employee’s case. But they were still short of funds. They then asked the excess insurer to cover the rest of the amount. The excess insurer then asked the excess insurer of the subcontractor to contribute its share towards the settlement of the employee’s claims.
The primary insurer of the subcontractor refused to honor the claim on the ground that they were informed of the claim two years after the employee had filed the claim. The primary insurer of the subcontractor refused the claim on the ground that the lateness of the information regarding the claim deprived them of their right to investigate the claim and to assess their proportionate exposure and liability to pay the claim.
This action was brought by the primary insurer of the owner of the Hudson Bridge and the primary insurer of the general contractor to claim payment from the primary insurer of the subcontractor its share. The primary insurers of the owner and general contractor argue that under the insurance contract, the written notice must be given as soon as practicable. The necessity of asking for a contribution from the excess insurer did not arise until the parties had arrived at a price for the negotiated settlement and the liabilities of the insurers had been calculated. Only then did it become obvious that the excess insurers would also need to contribute a share. They also claim that even after written notice was given to the excess insurer of the subcontractor, the excess insurer did not notify them that the claim would be denied by the excess insurer.
The question then to be resolved is: when is it reasonably necessary for the excess insurer to be informed? The Court held that the excess insurer must be informed at the time that the insured first learned of the accident or when the insured first learns of the grounds for disclaiming liability or denying coverage. While it may be true that the notice of claim given to the excess insurer was given late, the excess insurer’s denial of coverage is ineffective because it did not communicate it to denial of coverage as soon as reasonable possible. That is to say, even the excess insurer was guilty of having given late notice to the insured.
Did you suffer a spinal injury during the course of your employment? You need to consult a New York Spinal Injury Lawyer. A New York Spinal Injury attorney can help you determine what causes of action you may bring against the owner of the job site, the general contractor and your own employer. At Stephen Bilkis and Associates, their NYC Spinal Injury lawyers are ready and willing to represent you. Their NY Spinal Injury attorneys are ready to help you explore your options. Cal Stephen Bilkis and Associates today and speak with any of their New York City Spinal Injury Attorneys.