West Bay Exploration v. AIG Specialty Agencies

West Bay Exploration (plaintiff) learned in 1985 and 1986 that state regulators suspected it had improperly disposed of carcinogenic wastewater and required remediation, but it did not sue its liability insurers (defendants) -- whose policies required notice as soon as practicable -- until October 1987, with some insurers not added until even later. The insurers moved for summary judgment based on the delayed notice, and the trial court granted the motion; West Bay appealed.

Whether an insurer that demonstrates prejudice from an insured's delay in giving notice of a claim is relieved of liability under the policy.