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Late Notice Defense Upheld When Corporate President Knew of Accident

November 4, 2009

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In QBE Insurance Corporation v. D. Gangi Contracting Corp., plaintiff filed a declaratory judgment action in which it asserted that it was not obligated to defend and indemnify the defendant general contractor in an action for personal injuries filed by a worker injured on a construction site.
QBE disclaimed coverage on the ground of late notice of the underlying accident, claiming that Gangi did not notify it of the accident for three years. The terms of QBE’s policy required Gangi to provide notice of an occurrence as soon as reasonably practicable. The policy also provided, “Knowledge…by Your agent, servant or employee shall not in itself constitute knowledge of you unless the Corporate Risk Manager of Your corporation shall have received notice of such Occurrence.”
Gangi claimed that it was entitled to coverage, as its Corporate Risk Manager did not have knowledge of the incident during the three year period in which it failed to notify QBE of the accident.
QBE moved for summary judgment. The trial court granted the motion. Gangi then appealed.
In reaching its decision, the Appellate Division, First Department, noted that Gangi’s president admitted that he had knowledge of the accident as soon as it occurred. The court ultimately held that because Gangi’s president was an executive officer and not merely an “agent, servant or employee,” his knowledge was imputed to Gangi and triggered its duty to notify QBE of the accident. The First Department then affirmed the trial court’s decision and granted summary judgment to QBE.
Thanks to Brad Thelander for his contribution to this post.
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