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The Eleventh Circuit Court of Appeals, applying Florida law, held that an insurer could deny coverage for failure to provide timely notice where the insured provided no evidence to rebut the presumption of prejudice to the insurer. L. Squared Indus., Inc. v. Nautilus Ins. Co., 2025 WL 2922937 (11th Cir. Oct. 15, 2025).
The insured gas station owner-operator purchased a claims-made and reported insurance policy that provided coverage for cleanup costs and pollution conditions caused by underground storage tank ("UST") discharge. The policy required the insured to notify the insurer within seven days after the insured first became aware of a pollution condition that could result in any action to impose cleanup costs on the insured. In August 2018, the insured received a report alerting it of new UST discharges but did not notify its insurer about the discharge until April 2019, after it had incurred cleanup and defense costs arising from the incident. The insured sought indemnification from its insurer for these costs, but the insurer denied coverage based on late notice.
In the ensuing coverage action, the trial court granted summary judgment in favor of the insurer, holding that the policy did not provide coverage because the insured failed to timely notify the insurer as the policy required. The trial court's ruling rested solely on the insured's failure to comply with the policy's notice requirement, without requiring the insurer to prove prejudice. On appeal, the Eleventh Circuit affirmed the district court's decision, but, unlike the lower court, it presumed that the notice-prejudice rule would apply. Under Florida law, prejudice was presumed based on the insured's breach of the notice provision, and the court held that the insured failed to rebut this presumption because it did not timely raise such arguments in the trial court.
Laila Mustafa, a Law Clerk at Wiley Rein LLP, contributed to this blog post. Edited by Margaret Karchmer.
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