Late Notice: An Increasingly Dangerous Insurance Trap

The New Jersey Supreme Court recently issued its decision in Templo Fuente Vida Corp., et al. v. National Union Fire Ins. Co., (No: A-18-14)(074572), which may prove to deprive unwary insureds of valuable insurance coverage rights under their claims-made policies. The Templo Fuente court held that where a claims-made policy requires notice of the claim "as soon as practicable," the insurance carrier need not prove prejudice to deny a claim based on late notice, even if the notice was given during the policy period.

The court's analysis focused predominately on the difference between "claims-made" and "occurrence" policies. Relying on its 1985 opinion in Zuckerman v. National Union Fire Ins. Co., 100 N.J. 304 (1985), the court held that, if notice under a "claims-made" policy is late, there is no coverage, even if the insurer does not prove it was appreciably prejudiced. The court recognized that Zuckerman dealt with notice after the policy had expired, but found the