In a decision issued on May 29, 2025, New York’s Appellate Division, First Department reversed a lower court ruling and held that Hudson Excess Insurance Company is not required to defend or indemnify Mayer Malbin Realty I, LLC in an ongoing personal injury case. The ruling favored Hudson in a dispute involving multiple commercial parties and questions of timely notice under New York insurance law.
The case stems from a September 20, 2017 workplace accident, where You Tien Chen, a worker employed by subcontractor 177 TS Group, Inc., fell from a ladder while working at a construction site. The site was owned by Mayer Malbin, which was insured by Hartford Fire Insurance Company. TS Group, the subcontractor, held a policy with Hudson Excess Insurance Company that included provisions for additional insureds under specific conditions.
Chen sued Mayer in October 2017. In March 2018, Mayer filed a third-party complaint against TS Group. Although Hartford learned of TS Group’s policy with Hudson in October 2017, it did not notify Hudson or tender the claim until May 2020. Hudson denied coverage “at this time,” citing both Mayer’s unconfirmed status as an additional insured and the delay in notice, which it claimed was a material breach of the policy.
Under New York Insurance Law § 3420(c)(2)(A)(ii), if notice is not provided as soon as reasonably practicable, the insured must demonstrate that the insurer was not prejudiced. Hartford argued that Hudson wasn’t harmed because Mayer had defended the Chen action “vigorously.” The court disagreed.
The panel found the delay deprived Hudson of the opportunity to inspect the accident site, examine the ladder involved, and interview witnesses from TS Group while their memories were fresh. Mayer’s attorneys had not located, interviewed, or deposed key individuals from TS Group, including the owner and foreman. When Hudson was finally notified, the note of issue had already been filed, closing discovery and preventing access to relevant evidence.
The plaintiffs also argued that Hudson would have denied coverage even with timely notice, based on the belief that Mayer was not an additional insured. But at the time of the denial, Hudson had not received the subcontract needed to determine Mayer’s status. Once the subcontract was provided during discovery in this action, Hudson did not pursue the additional insured defense further. The court found no basis to conclude that earlier notice would have automatically led to a denial.
The appellate panel unanimously reversed the lower court’s February 20, 2024 order, vacated the declaration that Hudson had a duty to defend Mayer, and granted summary judgment to Hudson. The decision underscores how late notice and resulting prejudice can relieve insurers of coverage obligations—even when a policy might otherwise apply.
