A recent decision involving a Florida hotel should be studied by commercial policyholders, insurance agents, and property insurance claims professionals. The case, Touchmark Hotel Group, LLC v. Mt. Hawley Insurance Company, 1 reminds us that insurance coverage disputes are often decided not by the severity of the damage or the fairness of the claim, but by the timing of notice of loss and the law governing the policy.

A windstorm hit a hotel in Jacksonville, Florida, on January 4, 2023. The next day, the property manager observed shingles blown off the roof and scattered around the property. The owner is informed but does not report a claim because there are no visible leaks, and he believes the damage may not exceed the deductible. Months later, after water intrusion is discovered, the claim is reported.

That delay ended the case. The court granted summary judgment to the insurer, holding that the insured breached the policy’s prompt notice requirement as a matter of law. The reasoning was straightforward and unforgiving. Under New York law, which governed the policy due to an express choice-of-law clause, prompt notice is a condition precedent to coverage.

Following New York law, the court emphasized a principle that policyholders and their advisors too often overlook. The duty to provide notice of loss is triggered not when the insured knows the full extent of the damage, and not when the insured is certain a claim will exceed the deductible, but when a reasonable person would recognize the possibility that the policy might be implicated. That is a very low threshold.

In this case, the presence of storm-damaged shingles scattered across the property the day after the storm was enough. The court found that those facts alone would suggest to a reasonable person the possibility of a claim. The insured’s belief that the damage might be minor or below the deductible was irrelevant. The court rejected that argument outright, noting that uncertainty about the extent of damages does not excuse a failure to notify the insurer.

What makes this case particularly significant is not just the application of New York’s strict notice law, but the fact that this was a Florida loss involving a Florida property owner. The outcome would likely have been very different under Florida law, where late notice is typically analyzed through a prejudice framework. In Florida, an insurer often must demonstrate that it was prejudiced by the delay, or at least overcome a presumption. In New York, no such showing is required. The governing law clause decided the case as much as the facts did.

This raises a question that should not be ignored. Why would a Florida policyholder agree to a policy that requires disputes to be governed by New York law and litigated in New York courts? The answer, as is often the case in today’s insurance market, is that these policies are frequently placed in the surplus lines market, where options are limited. The risk may be difficult to insure, and the available carriers impose terms that shift legal advantages in their favor. That reality does not make the consequences any less severe.

What this case demonstrates is that policy language buried deep in endorsements can have more impact than the insuring agreement itself. A choice-of-law clause is not boilerplate. It is a strategic allocation of legal advantage. Policyholders and their insurance brokers must understand that they are not just buying coverage. They are choosing the rules under which coverage will be evaluated.

Another lesson from this case is even more practical and perhaps more important. Commercial policyholders must train their property managers and on-site personnel to report any damage immediately. Not when it becomes serious. Not when leaks appear. Not when someone decides it is worth making a claim.

The policy does not say “report losses when you are sure.” It says report promptly.

In this case, the property manager did exactly what most managers often do. He observed damage, reported it internally, and no one escalated it to the insurer because it did not seem significant at the time. That internal decision-making process cost the policyholder its coverage. If the manager had simply reported the damage through proper channels with the understanding that all potential losses must be noticed, the outcome of this case could have been entirely different.

There is also an important litigation lesson. The court was not persuaded by attempts to minimize the initial damage. The insured tried to characterize the loss as involving only a small number of shingles, but the court relied on the insured’s own testimony that shingles were “all over” the property. When a party attempts to reframe facts in a way that contradicts its own record, courts are quick to dismiss those efforts as manufactured disputes. Credibility begins with consistency.

Interestingly, the court did not even reach the insurer’s second major argument that the policyholder’s proof of loss contained misrepresentations regarding the cost of roof replacement. The late notice issue was sufficient to dispose of the case entirely.

The broader takeaway is this. Insurance policies are contracts of conditions as much as they are contracts of coverage. Those conditions, especially notice provisions under New York law, are not technicalities. They are enforceable obligations that can determine whether coverage exists at all. We have warned about New York conditions before in New York Notice of Claim Requirements.

To reiterate the lessons from this case, policyholders should demand that their brokers explain not only what is covered, but also under what law the policy will be interpreted. Agents should recognize that placing a policy with an out-of-state choice-of-law provision carries real consequences that must be disclosed and understood. Property insurance claims professionals should document when an insured first became aware of the damage, as that date may ultimately decide the case. Finally, property managers should be taught a simple rule about notice of loss: If you see damage, report it. It could save millions of dollars in lost coverage.

If you are interested in the New York notice of loss issue more than the attached case opinion and briefs, I suggest you read Shaun Marker’s post, Notice Of Loss Requirements In New York State. I also suggest that those interested in these choice of law provisions sold by many surplus lines carriers read my post, Surplus Lines Carriers Select Arbitration and Choice of Law in New York to Pay Less Coverage and Less on Claims.

Thought For The Day

“There are roughly three New Yorks. There is, first, the New York of the man or woman who was born there… Second, there is the New York of the commuter… Third, there is the New York of the person who was born somewhere else and came to New York in quest of something.
— E.B. White

1 Touchmark Hotel Group v. Mt. Hawley Ins. Co., No. 24-cv-6744 ( S.D. N.Y. Mar. 24, 2026). See also, Mt. Hawley Motion for Summary Judgment, Touchmark Response to Motion, and Mt. Hawley Reply to Touchmark Response.