G.L.G. Contracting Corp. v. Aetna Casualty & Surety Co.
Plaintiff, a general contractor, failed to notify its liability insurer (defendant) about an employee's construction accident for nearly three years. After the injured employee initiated a personal injury lawsuit against plaintiff under the Labor Law, plaintiff notified its insurer, who then disclaimed coverage citing untimely notice. Plaintiff subsequently sued for a declaratory judgment, arguing it had a reasonable belief in nonliability. Defendant moved for summary judgment, contending plaintiff's owner, an experienced contractor and insurance broker, should have known of potential liability. The Supreme Court denied defendant's motion, ruling the reasonableness of belief in nonliability is a factual issue. The appellate court affirmed this decision, reserving credibility issues for the trier of fact.