Breach of notice provision versus breach of cooperation clause- who has the burden of proving prejudice?

Pursuant to the case law in Florida, different presumptions arise depending on whether an insured has breached a notice provision or a duty to cooperate.

If the insured breaches the notice provision, prejudice to the insurer will be presumed, and the burden is on the insured to rebut this presumption by a showing that the insurer has not been prejudiced by the lack of notice. National Gypsum Co. v. Travelers Indemnity Co., 417 So.2d 254 (Fla.1982).  “[T]he notice requirement enables the insurer to conduct a timely and adequate investigation of all of the circumstances surrounding the accident.” Arce v. Citizens Prop. Ins. Corp., 388 So. 3d 205, 212 (Fla. 3rd DCA. 2024), review denied, No. SC2024-0174, 2024 WL 1830716 (Fla. Apr. 26, 2024), quoting Bankers Ins. Co. v. Macias, 475 So. 2d 1216, 1217 (Fla. 1985). “The prompt notice provision recognizes the reality that in most, if not all, cases, the insured is in a far better position than the insurer to know when a loss has occurred.” Arce at 212.

If the insured breached the cooperation clause, the burden is on the insurer to show that there was a material failure to cooperate which has substantially prejudiced the insurer. Ramos v. Northwestern Mutual Insurance Co., 336 So.2d 71 (Fla.1976); See also Barthelemy v. Safeco Ins. Co. of Illinois, 257 So. 3d 1029, 1030 (Fla. 4th DCA 2018). The cooperation clause is in the policy in order to prevent fraud and collusion in proceedings to determine liability once notice has been given. See Bankers Ins. at 1217 (Fla. 1985). If a carrier wants to deny coverage based on a breach of the duty to cooperate, it must timely comply with the requirements in Florida Statute 627.426.  

Therefore, if there has been a breach by the Insured, pay close attention as to which portion of the policy has been breached, and which party has the burden of proof on prejudice.