Country Mutual Ins. Co. v. Livorsi Marine, Inc. , 2006 WL 1348722 (Ill. May 18, 2006) makes no sense to me. The Illinois Supreme Court affirmed a lower court’s holding that an insurer is not required to prove prejudice as a condition of refusing coverage under an occurrence policy’s late notice provision. As a justification, the Supreme Court cited Illinois precedent, but totally whiffed on trying to come up with a better reason for such a rule.
Probably the least persuasive part of the opinion was the attempt to show the difference between Illinois’ requirement of prejudice for an insured’s breach of a policy’s cooperation clause, and the lack of a prejudice rule for late notice. In my opinion, there really isn’t a reason for a prejudice rule in one instance but not the other. It’s mystifying. Maybe some of you folks in Illinois and elsewhere can make better sense of this than I can.