Better Late Than Never: Lloyd's Underwriters v. Blue Mountain Log Sales

In Lloyd's Underwriters v. Blue Mountain Log Sales, Blue Mountain, which was insured by Lloyd's, was named as a defendant in a law suit in Washington State. Blue Mountain did not realize that the law suit might trigger coverage under its insurance policies and did not tender its defence to Lloyd's until almost two years after the litigation first arose and during that period, defence costs were incurred.

Lloyd's applied for a declaration that it had no liability for pre‑tender defence costs and relied upon standard CGL policy provisions which included:

"Upon the happening of an accident or occurrence which may give rise to a claim hereunder, the Insured shall give notice thereof as soon as practicable ..."