A member of a church congregation allegedly fell and was injured on the church premises following a funeral service. A church official, at the request of the pastor, telephoned the office of the church's insurance broker the following morning and, according to her testimony, was told by an employee of the broker that the church's general liability insurer would be notified.

The church received a letter nine months later from the injured person's attorney, threatening a lawsuit. It was given to the broker, who promptly sent a written notice of claim to the insurance company's agent. The insurer, having had no prior knowledge of the accident, denied coverage because of late notice based on a policy requirement that the insured give it written notice of an accident as soon as practicable.

The insurance company brought a declaratory judgment action to determine the rights of the parties. It appealed from a judgment declaring that it must defend and indemnify the church. Though the trial court found that the church had not proved an agency relationship between its broker and the insurance company, it concluded that the circumstances justified the late providing of written notice to the insurer. It was noted that there was a sticker on the face of the policy informing the insured to notify the broker "in case of loss."

The appeal court concluded that "....the broker is deemed to be the agent of the insured, and notice to the broker cannot be treated as notice to the insurer." It said that the church had not proved an agency relationship between its broker and the insurer. The insurer did not authorize the broker's loss notice sticker on the policy nor any change in the loss notice requirements spelled out in the policy.

The judgment of the trial court was reversed in favor of the insurance company and against the insured church.

(AGWAY INSURANCE COMPANIES, Respondent, Appellant, v. WILLIAMSON ET AL., Appellants; KNIGHT AGENCY, INC., Appellant, Respondent. New York Supreme Court, Appellate Division, Fourth Department. June 22, 1990. 557 N.Y.S.2d 193. CCH 1990 Fire and Casualty Cases, Paragraph 2742.)