Authored by Donald Dinnie and Luyanda Hlongwane.
In June 2026, a Federal District Court in Florida confirmed that failing to give prompt notice of a loss to an insurer can justify rejection of an insurance claim even where an indemnified loss occurred if the insured has taken steps that affected the insurer’s investigations.
Following a plumbing related incident, the insured property owner discovered water damage but waited 46 days before notifying its insurer. During that time, the insured property owner demolished and repaired the affected area and renovated the property extensively. The court found that the delay breached the policy requirement to give “prompt notice,” which is intended to allow the insurer time to investigate the damage properly.
This case raises two distinct questions that are often conflated in insurance disputes. The first question is what amounts to "prompt notice" under a policy and secondly, what role prejudice to the insurer plays when notice is delayed.
Insurance policies often use phrases such as "prompt notice" or notice "as soon as practicable". Although courts generally assess this on the facts of each case, the focus is whether the insured reported the claim within a reasonable time after becoming aware of the loss. Where an insured has already undertaken significant repairs and renovations before notifying the insurer, it can no longer be plausible that making the notification after these alterations have been done could be deemed as “prompt”. The purpose of a notice provision is to allow the insurer an opportunity to investigate the cause, extent and validity of the claim while the relevant evidence remains available.
The facts of the case illustrate why prejudice is often linked to delayed notification. By the time the insurer became aware of the claim, the original condition of the property could no longer be inspected. The court therefore found that the insurer had been prejudiced in its ability to investigate the loss. Equally important, however, is the fact that prejudice should not be confused with the notice requirement itself. Notice may have been in time, yet the insurer may still argue that its ability to investigate was compromised. This demonstrates that notice and prejudice are related but analytically separate concepts. This case highlights the need to carefully consider whether policy language requiring notice "as soon as practicable" is equivalent to a requirement of "prompt" notice.
For policyholders, the safest course remains to notify insurers immediately upon discovering a potentially insured loss and, where possible, to preserve evidence until the insurer has had a fair opportunity to inspect the damage. A delay in notification, particularly where repairs alter or remove key evidence, may place coverage at risk even where the underlying loss is genuine.