Docket No. 99807.



### IN THE

SUPREME COURT

OF

THE STATE OF ILLINOIS

COUNTRY MUTUAL INSURANCE COMPANY, Appellee, v. LIVORSI MARINE, INC., et al ., Appellants.

Opinion filed May 18, 2006.

JUSTICE GARMAN delivered t he judgment of the court, with opinion.

Chief Justice Thomas and Ju stices Freeman, McMorrow, Fitzgerald, Kilbride, and Karmeie r concurred in the judgment and opinion.

OPINIONThe circuit court of Cook County granted a declaratory judgment to Country Mutual In surance Company, determining that it had no duty to defend or indemnify the defendant policyholders in this case. T he appellate court affirmed this decision. 358 Ill. App. 3d 880. We granted defendants = petition for leave to appeal (177 Ill. 2d R. 315), and now affirm.

Background Defendants Gaffrig Performanc e Industries, Inc., and Livorsi Marine, Inc., each ca rry commercial general liability insurance policies with Country Mu tual Insurance Company. In December 1999, Livorsi brought a lawsuit against Gaffrig in the United States District Court for t he Northern District of Illinois. The suit alleged various trademark violations related to the use of the A Gaffrig Precision Instruments @ name. In response, Gaffrig filed a lawsuit with sim ilar allegations against Livorsi. The suits, which sought both damages and injunctive relief, were consolidated. Gaffrig Performance Industries, Inc. v. Livorsi Marine, Inc., Nos. 99 C 7778, 99 C 7822 cons. (N.D. Ill. December 22, 2003). The language of both Gaffrig = s and Livorsi = s insurance policies gives Country Mutual t he duty to defend and indemnify its insureds in any lawsui t seeking damages based on an advertising injury:

A We will pay those sums that the insured becomes legally obligated to pay as damages because of

> personal injury = or > advertising injury = to which this coverage part applies. We will have the right and duty to defend any > suit = seeking those damages. We may at our discretion investigate any > occurrence = or offense and settle any claim or > suit = that may result. @ As a condition of coverage, t he policies require Gaffrig and Livorsi to notify Country Mutual of any lawsuit:

A If a claim is made or > suit = is brought against any insured, you must: (1) Immediately record the specifics of the claim or

> suit = and the date received; and (2) Notify us as soon as practicable.- 3 - You must see to it that we receive written notice of the claim or > suit = as soon as practicable. @ Although Gaffrig and Livorsi filed their lawsuits on December 1, 1999, neither party informed Country Mutual of the consolidated suit until August 2001. Country Mutual then filed a complaint for declaratory judgment in the circuit court of Cook County. The insurer sought a judgment that it had no obligation to defend or indemnify either Livorsi or Gaffrig in connection with the trademark lawsuit. Country Mut ual argued that the claims raised in the lawsuit did not fit the policy = s definition of

A advertising injury @ and that both Livorsi and Gaffrig breached the notice condition of their policies by failing to inform Country Mutual of the lawsuits for more than 20 months. Testimony during a brief trial centered on telephone conversations between Michael Livorsi, the owner of Livorsi Marine, Inc., and Gary Miller, t he Country Mutual agent for both Gaffrig and Livorsi. These conversations concerned the possibility of a lawsuit between Gaffrig and Livorsi and occurred prior to the filing of t he trademark suit. As the parties stipulated, Country Mutual did not receive actual notice of the lawsuit until August 2001, more than 20 months after Gaffrig and Livorsi filed suit. In pretrial and posttrial brie fing, Gaffrig and Livorsi argued that Country Mutual was not prejudiced by the companies = delay in notifying their insurer of the lawsuit. The companies argued that because Country Mut ual insured both parties, it had a conflict that would have prevented the insurer from investigating the claim or defendi ng either party in the lawsuit over the Gaffrig Precision Inst ruments trademark. Gaffrig and Livorsi therefore argued that the insurer would have had to pay for independent counsel for both par ties regardless of when it received notice, and so the ti ming of the notice did not prejudice the insurer. Thus, the delay in notice should not relieve Country Mutual of it s duty to defend. The companies found support for this argument in a line of cases beginning
with Rice v. AAA Aerostar, Inc. , 294 Ill. App. 3d 801 (1998). The opinion in Rice stated that, A When notice of the lawsuit is the issue, the rule is that the insurer is required to show that it- 4 - was prejudiced by the insured = s omission or delay in order to escape liability on its policy. @ Rice , 294 Ill. App. 3d at 807-08. Country Mutual argued that the proper inquiry was not whether the insurer was prejudic ed, but whether the insureds had given Country Mutual reas onable notice of the lawsuit. Under other appellate cases, prej udice to the insurer is one of several factors in assessing t he reasonableness of notice. See,

e.g.

, Northbrook Property & Casualty Insurance Co. v. Applied Systems, Inc. , 313 Ill. App. 3d 457, 466 (2000). Country Mutual argued that such a lengthy del ay, without an excuse from Gaffrig and Livorsi, was unreasonable as a matter of law. Thus, this breach of the policies = notice conditions should relieve Country Mutual of its obligat ion to defend and indemnify the companies in their lawsuit.

The circuit court found that the claims in the federal lawsuit potentially fell within the insu rance policy language covering advertising injuries, triggering Country Mutual = s duty to defend. That conclusion is not at issue in this appeal. The court also determined that Gaffrig and Livo rsi failed to give Country Mutual the notice to which it was entitled. It addressed Gaffrig and Livorsi = s prejudice argument in the following manner:

A In determining an insurer = s liability under the circumstances presented here, there is a case to be made for considering whether late notice actually prejudiced the insurer. However, any such possible argument tends to lose its force where there is no reasonable justification or excuse offered for not having given timely notice ***. In the present case, there has been literally no evidence of any justification or excuse offered by either of the defendants for a delay of more than 21 months in the givi ng of notice to Country Mutual. Under the circum stances, unless the court adopts the position that an unambiguous term of a contract may not be enforced unless the aggrieved party demonstrates some direct harm, there can be only one consequence flowing from the facts of this case. @ Accordingly, the circuit cour t entered judgment in favor of Country Mutual. Gaffrig and Li vorsi appealed this decision. Prior to the appellate court = s consideration of the case, the- 5 - underlying trademark suit was re solved. The federal court granted Gaffrig = s request for an injunc tion against Livorsi = s use of the disputed trademarks. Gaffr ig Performance Industries, Inc. v. Livorsi Marine, Inc., Nos. 99 C 7778, 99 C 7822 cons. (N.D. Ill. December 22, 2003) . The court did not award monetary damages to either party. In the absence of damages, Country Mutual = s duty to indemnify is no longer an issue in this case. The appellate court therefore addressed only the insurer = s duty to defend. 358 Ill. App. 3d 880. The appellate court prem ised its decision on two concessions it concluded could be found in the parties = briefs. 358 Ill. App. 3d at 883. It dete rmined that Gaffrig and Livorsi conceded that the notice they gave Country Mutual was unreasonably and inexcusably late. 358 Ill. App. 3d at 883. The court also determined that C ountry Mutual conceded that, because of the conflict of intere st, it could not prove it was prejudiced by the late notice. 358 Ill. App. 3d at 883. Thus, it framed the issue in the following terms: A Given the circumstances presented to us, did Country Mutual have to prove prejudice? @ 358 Ill. App. 3d at 883.

The court noted the distincti on between notifying an insurer of an occurrence and notifying an in surer of a lawsuit. 358 Ill. App. 3d at 885. It determi ned that when notice of an occurrence is the issue, courts c onsider prejudice to the insurer as one of several factors in the evaluation of whether the insurer received reasonable notic e. 358 Ill. A pp. 3d at 884. Additionally, some appellate decisi ons consider prejudice to the insurer only when the insured has a good excuse for the late notice of occurrence or where the delay in notice was relatively brief. 358 Ill. App. 3d at 885. However, when notice of suit is the issue, some appellate decisi ons state that prejudice is required for the insurer to deny coverage based on late notice. 358 Ill. App. 3d at 885. The appellate court then addressed each decision embracing the latter pr oposition, beginning with Rice . 358 Ill. App. 3d 885-87. It noted that Rice was the first case to distinguish between notice of o ccurrence and notice of suit, and that this distinction did not have a basis in Illinois precedent. 358 Ill. App. 3d at 885. Further, prejudice did not- 6 - actually play a role in the Rice court = s decision. 358 Ill. App. 3d at 886. The court then examined cases citing Rice and concluded that these cases also did not rely on the Rice dictum for their holdings. 358 Ill. App. 3d at 886-87. Citing a line of cases contrary to Rice , it concluded that t here is no basis for distinguishing between notice of an occurrence and notice of a lawsuit. 358 Ill. App. 3d at 887-88. The court found that Country Mu tual did not have to prove prejudice in order to deny cove rage. 358 Ill. A pp. 3d at 888. It reached the following two conclusions:

A (1) An insurer = s failure to prove pr ejudice is a factor to consider when determi ning whether the insured = s notice was unreasonably and inexcusably late, whether the notice has to do with an occurrence or a lawsuit; (2) Once it is determined the insured = s notice was unreasonably and inexcusably late, the failure of the insurer to prove it suffer ed prejudice is irrelevant, whether the notice has to do with an occurrence or a lawsuit. @ 358 Ill. App. 3d at 888. Gaffrig and Livorsi petitioned th is court for leave to appeal. We allowed their petition. 177 I ll. 2d R. 315. We granted leave to file briefs amici curiae in support of Gaffrig and Livorsi to the Illinois Manufacturers Associat ion, United Policyholders, and several Illinois businesses. We al so granted leave to the Illinois Insurance Association, Property Casualty Insurers Association of America, and National Associ ation of Mutual Insurance Companies to file a brief amicus curiae in support of Country Mutual.

Standard of review Gaffrig, Livorsi, and their amici urge this court to adopt the rule that an insurance company t hat receives delayed notice of a lawsuit must prove that it was prejudiced by the delay in order to be relieved of its dut y to defend a policyholder. In essence, they ask us to establis h a new rule of construction for certain insurance policy notic e provisions. This argument presents a question of law that we review de novo . See Travelers Insurance Co. v. Eljer Manufacturing, Inc. , 197 Ill. 2d- 7 - 278, 292 (2001) (construction of in surance contract is reviewed de novo ).

Analysis When construing the language of an insurance policy, a court is to ascertain and give e ffect to the intentions of the parties as expressed by the words of the policy. Central Illinois Light Co. v. Home Insurance Co. , 213 Ill. 2d 141, 153 (2004). An insurance policy must be c onstrued as a whole, giving effect to every provision. Central Illinois Light Co. , 213 Ill. 2d at 153. If the words used in the policy are unambiguous, they are given their plain, ordi nary, and popular meaning. Central Illinois Light Co. , 213 Ill. 2d at 153. Alt hough insurance policies are construed liberally in favor of coverage, this rule of construction comes into play only when the policy language is ambiguous. Hobbs v. Hartford Insur ance Co. of the Midwest , 214 Ill. 2d 11, 17 (2005). This court has previously addressed the proper construction of insurance policy notice prov isions. These clauses impose valid prerequisites to insurance coverage. Barrington Consolidated High School v. American Insurance Co. , 58 Ill. 2d 278, 281 (1974); see also International Harvester Co. v. Continental Casualty Co. , 33 Ill. App. 2d 467, 471 (1962), citing Imperial Fire Insurance Co . of London v. Coos County , 151 U.S. 452, 38 L. Ed. 231, 14 S. Ct. 379 (1894). A policy condition requiring notice A [a]s soon as practicable @ is interpreted to mean A within a reasonable time. @ Barrington Consolidated High School , 58 Ill. 2d at 282. Whether notice has been given within a reasonable time depends on the facts and circumstances of each case. Barrington Consolidated High School , 58 Ill. 2d at 282. Breaching a policy = s notice clause by failing to give reasonable notic e will defeat the right of the insured party to recover under the policy. Simmon v. Iowa Mutual Casualty Co. , 3 Ill. 2d 318, 322-23 (1954).

In Simmon , this court discussed the ro le of prejudice in the reasonableness analysis. The plaintiff in Simmon had been injured in an automobile accident by a policyholder of the insurance company. Simmon , 3 Ill. 2d at 319. She promptly- 8 - notified the policyholder = s insurance company of the incident and of the lawsuit she filed. Simmon , 3 Ill. 2d at 319-20. Although notice was not given by the insured, the court held that it does not matter who notif ies the insurer, as long as reasonable notice is given. Simmon , 3 Ill. 2d at 322-23. The court noted that, when examini ng the facts and circumstances of each case to determine if notice was reasonable, A lack of prejudice may be a factor in determining the question of whether a reasonable notice was giv en in a particular case yet it is not a condition which will dispense with the requirement. @ Simmon , 3 Ill. 2d at 322. When presented with an alleged breach of an insurance policy notice clause, the vast majority of Illinois appellate decisions have utilized an analysis that is consistent with Simmon . That is, courts have exam ined the circumstances of the case, including the presenc e or absence of prejudice, and determined whether the insurer in question received reasonable notice. See, e.g.

, Northbrook , 313 Ill. App. 3d at 466; University of Illinois v. C ontinental Casualty Insurance Co. , 234 Ill. App. 3d 340, 365-66 (1992); Hartford Casualty Insurance Co. v. Snyders , 153 Ill. App. 3d 1040, 1042-43 (1987); United States Fidelity & Guaranty Co. v. Maren Engineering Corp. , 82 Ill. App. 3d 894, 898 (1980); McFarlane v. Merit Insurance Co. , 58 Ill. App. 3d 616, 619 (1978). When analyzing whether notice was r easonable, some courts have stated that prejudice is not a fact or unless the delay in notice is relatively brief or the insured has a good excuse (see, e.g.

, Twin City Fire Insurance Co. v. Old World Trading Co. , 266 Ill. App. 3d 1, 8-9 (1993); Fletcher v. Palos Community Consolidated School District No. 118 , 164 Ill. App. 3d 921, 928 (1987)), although this additional qualification is not found in Simmon . But even that permutation of the Simmon rule appropriately locates prejudice as one potential factor in the reasonableness analysis (see Simmon , 3 Ill. 2d at 322), rather than as a separate considerati on to be reached only if there has not been reasonable notice. Other factors in the reasonableness analysis may include the specific language of the policy = s notice provision, the insured = s sophistication in commerce and insurance matters, the insured = s awareness of- 9 - an event which may trigger in surance coverage, and the insured = s diligence in ascertaining whether policy coverage is available. See Northbrook , 313 Ill. App. 3d at 466.

Illinois courts have generally applied the Simmon analysis regardless of the type of notice that is at issue. 1 Insurance policies are likely to contain tw o different notice conditions: one that requires notice of the occu rrence of an incident which may fall within the policy = s coverage, and one that requires notice of any lawsuit stemming from such an incident. When interpreting notice provisions, most Illinois decisions have not differentiated between the two requi rements. See, e.g.

, American Family Mutual Insurance Co. v. Blackburn , 208 Ill. App. 3d 281, 284, 291 (1991) (applying same standar d to evaluate delayed notice of occurrence and notice of suit); Employers Reinsurance Corp. v. E. Miller Insurance Agency, Inc. , 332 Ill. App. 3d 326, 336-37 (2002) (examining several factors to determine whether notice of suit was given within a reasonable time); American Home Assurance Co. v. City of Granite City , 59 Ill. App. 3d 656, 658 (1978) (requiring notice of occurrence within reasonable time based on facts and ci rcumstances of case). In sum, the Simmon rule has been widely a ccepted as the proper analysis for review of all not ice requirements contained in insurance policies. Certain recent appellate cases, however, refer to a different rule. This line of cases begins with Rice v. AAA Aerostar, Inc.

, 294 Ill. App. 3d 801 (1998). In Rice , the plaintiff notified the defendant = s insurer that she had been injured on defendant = s

1 We note, however, that notice requirements play a different role in claims-made policies than in occurre nce-based policies such as those at issue today. See Central Illinois Light Co. v. Home Insurance Co. , 213 Ill. 2d 141, 173 (2004) (occurrence-based policies indemnify against claims occurring in a certain time period, regardless of when claims are made, while claims-made policies indemnify ag ainst claims made during a certain period, regardless of when underlying incidents occurred). Accordingly, each type of policy is analyzed differently by Illinois courts. See, e.g. , Continental Casualty Co. v. Coregis Insurance Co. , 316 Ill. App. 3d 1052, 1062-63 (2000) (addressing claims-made policy). Today = s opinion does not address the role of notice requirements in claims-made policies.- 10 - property, but allegedly failed to not ify the insurer of the lawsuit she subsequently filed. Rice , 294 Ill. App. 3d at 804. The court distinguished between notice of an occurrence and notice of a lawsuit, stating that when the latter is at issue, A the rule is that the insurer is required to show that it was pr ejudiced by the insured = s omission or delay in order to escape liability on its policy. @ Rice , 294 Ill. App. 3d at 807- 08, citing C. Marvel, Annotation, Modern Status of Rules Requiring Liability Insurer to Show Prejudice to Escape Liability Because of Insured = s Failure or Delay in Giving Notice of Accident or Claim, or in Forwarding Suit Papers , 32 A.L.R.4th 141, 145 (1984). However, the appellate court did not apply this rule. Instead, it determined that the insurer failed to show it did not receive actual notice of the lawsuit, and reversed the circuit court = s grant of summary judgment. Rice , 294 Ill. App. 3d at 808-09.

The Rice court did not cite any Illinois precedent in support of its statement that an insu rer must show that it was prejudiced by a delay in notic e of suit. It relied only on a general annotation. See Rice , 294 Ill. App. 3d at 807-08, citing 32 A.L.R.4th at 145. The annotation in question also does not cite any Illinois case law to support the rule embraced by Rice

. See 32 A.L.R.4th at 157-71. In fact, the annotation cites several Illinois cases in s upport of the pr oposition that

A prejudice to a liability insurer is one factor in the determination of the question of the reasonableness of the insured = s omission or delay in giving the insure r notice of an accident, or in forwarding suit papers to it. @ 32 A.L.R.4th at 156, citing Kenworthy v. Bituminous Casualty Corp. , 28 Ill. App. 3d 546 (1975), Rivota v. Kaplan , 49 Ill. App. 3d 910 (1977), American Home Assurance Co. v. City of Granite City , 59 Ill. App. 3d 656 (1978), and Illinois Valley Minerals Corp. v. Royal-Globe Insurance Co. , 70 Ill. App. 3d 296 (1979) . This proposition may be recognized as the Simmon rule. Simmon , 3 Ill. 2d at 322 ( A lack of prejudice may be a factor in determining the question of whether a reasonable notice was given in a particular case @ ). Thus, the Rice court = s rule

B that an insurer attempting to escape liability must show it wa s prejudiced by a policyholder = s delay in giving notice of a lawsuit

B was completely unsupported by Illinois precedent and actively contradicted Simmon

.- 11 - Nevertheless, subsequent appellate decisions have cited Rice for its new rule, even if they have not applied it. See Vega v. Gore , 313 Ill. App. 3d 632, 634 (2000); AAA Disposal Systems, Inc. v. Aetna Casualty & Surety Co. , 355 Ill. App. 3d 275, 284 (2005); Montgomery Ward & Co. v. Home Insurance Co. , 324 Ill. App. 3d 441, 449 (2001); Illinois Founders Insurance Co. v. Barnett, 304 Ill. App. 3d 602, 611-12 (1999); Cincinnati Insurance Co. v. Baur = s Opera House, Inc. , 296 Ill. App. 3d 1011, 1018 (1998); Zurich Insurance Co. v. Walsh Construction Co. of Illinois, Inc. , 352 Ill. App. 3d 504, 511 (2004). Although citing Rice , the Vega court apparently considered prejudice to the insu rer as one indicator that the insurer did not receive r easonable notice of a lawsuit. Vega

, 313 Ill. App. 3d at 636. AAA Disposal and Montgomery Ward dealt with notices of occurrenc es, and therefore cited the Rice rule about notice of suit only to determine that it did not apply. AAA Disposal , 355 Ill. App. 3d at 284; Montgomery Ward , 324 Ill. App. 3d at 449. The court in Illinois Founders mentioned Rice = s reference to insurer prejudice, but did not rely on prejudice for its decision, dete rmining instead that the notice requirement at issue had not been breached. See Illinois Founders , 304 Ill. App. 3d at 611-12. The court in Zurich reached a similar result. Zurich , 352 Ill. App. 3d at 511-12. In Cincinnati Insurance Co. , the appellate court found that the insurer had received reasonable not ice, but was nevertheless prejudiced, and remanded for rec onsideration in light of Rice

. Cincinnati Insurance Co. , 296 Ill. App. 3d at 1020. Another

case, Household International, Inc. v. Liberty Mutual Insurance Co. , 321 Ill. App. 3d 859 (2001), cited Illinois Founders for the Rice rule, but did not require that rule for its result because it found that the excess insure r in question had no duty to defend. Household International , 321 Ill. App. 3d at 877. We will not permit the anomaly of Rice to supersede decades of case law that accords with this court = s statement in Simmon . The relevant language in Simmon states not only that

A lack of prejudice may be a factor in determining the question of whether a reasonable notice was given in a particular case, @ but that lack of prejudice A is not a condition which will dispense with the requirement @ of reasonable notice. Simmon , 3 Ill. 2d at- 12 - 321. Simmon therefore clearly held t hat even if there is no prejudice to the insurer, a policyholder still must give reasonable notice according to the terms of the insurance policy. This court in Simmon did not distinguish between notice of an occurrence and notice of a lawsuit, and we decline to do so today. Accordingly, we hold that the presence or absence of prejudice to the insurer is one factor to consider when determining whether a policyhol der has fulfilled any policy condition requiring reasonable notice. We also hold that once it is determined that the insurer di d not receive reasonable notice of an occurrence or a lawsuit, t he policyholder may not recover under the policy, regardless of whether the lack of reasonable notice prejudiced the insure r. To the extent that Rice and its progeny contradict our holdings, these cases are overruled. However, defendants and their amici do not rely on Rice alone to argue that this court should adopt a new rule. For several reasons, they propose va rying forms of a requirement that an insurer must show it wa s prejudiced by untimely notice if it wishes to deny coverage based on the breach of a notice condition. Gaffrig and Livorsi argue that this court should adopt this prejudice requirement w hen construing policy conditions that require timely notice of suit, while their amici argue that we should adopt a prejudice requirement for breaches of all policy conditions requiring notice. We do not find the arguments for either approach to be persuasive. First, defendants and their amici argue that adopting a prejudice requirement would ali gn Illinois with a majority of states. Many other states do utilize this requirement, an approach which is frequently known as the A notice-prejudice @ rule. See Friedland v. Travelers Indemnity Co. , 105 P.3d 639, 643 (Colo. 2005). While these stat es do require a showing of prejudice for an insurer to e scape a policy obligation because of delayed notice, we note t hat their case law does not distinguish between notice of an occurrence and notice of a lawsuit. See, e.g.

, Atchison, Topeka & Santa Fe Ry. Co. v. Stonewall Insurance Co. , 275 Kan. 698, 761-62, 71 P.3d 1097, 1139 (2003) ( A this court has not indicated that it would make a distinction between notice of an occurrence and a suit @ ); Miller- 13 - v. Marcantel, 221 So. 2d 557, 560 (La. App. 1969) ( A We are unable to discern any logical or functional reason why a different rule should apply in Louisiana to the delayed notice of suit, than we now apply to the delayed notice of accident @ ); Cooperative Fire Insurance Ass = n of Vermont v. White Caps,
Inc. , 166 Vt. 355, 361-62, 694 A.2d 34, 38-39 (1997) (addressing the purpose of policy provisions requiring notice of accident, claim, or suit); see generally 32 A.L.R. 4th 141, 145 (1984). Instead, states that use the A notice-prejudice rule @ require a showing of prejudice when an in surer seeks to escape policy obligations based on any type of delayed notice. In contrast, the Rice rule endorsed by Gaffrig and Livorsi requires a showing of prejudice only when the delay at issue is a delay in notice of suit. Because the Rice rule treats notice of suit differently than notice of occurrence, the Rice rule is inconsistent with other states wh ich treat all forms of notice in the same way. Thus, adopting the Rice rule would create a new inconsistency between Illinoi s and its sister states: we would become unique by treating different types of notice differently. We see no reas on to abandon our own precedent for a new and unique inconsisten cy, and therefore Gaffrig and Livorsi = s argument in favor of consistency fails.

Defendants = amici make a stronger argument for consistency by asking us to adopt the notice-prejudice rule for both notice of occurrence and notic e of suit, as other states have done. However, we are not inclined to adopt a rule that the parties themselves have not requested. Second, defendants and their amici argue that public policy considerations favor a prejudice requirement. They argue that the terms of insurance contract s are not freely negotiated, that public policy favors risk-spreading and compensation of injured parties, and that an insurer shoul d not receive a windfall based on a policyholder = s technical violation. Country Mutual and its
amici counter with the argument that it is unfair to impose the burden of proving prejudice on the insurer when it is comparatively easy for a policyholder to give notice. They also argue that requiring insurers to prove prejudice would increase costs for insurers and the public. We need not address these- 14 - policy arguments at great lengt h. Balancing dueling policy concerns is a more appropriate ro le for the legislature than for this court. Cf. Members Mutual Insurance Co. v. Cutaia , 476 S.W.2d 278, 281 (Tex. 1972) ( A on balance, it is better policy for the contracts of insurance to be changed by the public body charged with their supervision, the State Board of Insurance, or by the Legislature, rather than for this Court to insert a provision that violations of conditions precedent will be excused if no harm results from their violation @ ); PAJ, Inc. v. Hanover Insurance Co. , 170 S.W.3d 258, 262 (T ex. Civ. App. 2005) (explaining regulation that responded to Cutaia ). However, we do note that the defendant companies = policy arguments have as a common them e the disparate balance of power between insurer and policy holder. This theme is not especially persuasive when the policyholders in the present case are two sophisticated commercial parties who were represented by counsel from t he inception of the events in question, particularly when one policyholder contacted the insurer prior to filing suit and was advised to take steps to determine if coverage would be available. One policy argument bears spec ial attention. Gaffrig, Livorsi, and their amici argue that the notice-prejudice requirement would be consistent with the rule this court adopted in M.F.A. Mutual Insurance Co. v. Cheek , 66 Ill. 2d 492 (1977). In Cheek , we addressed cooperation clauses, insurance policy conditions which require the policyholder to cooperate with the insurer. Cheek , 66 Ill. 2d at 498. We held that unless a breach of the c ooperation clause substantially prejudices the insurer, the insure r cannot rely on the breach to escape its obligations under the policy. Cheek , 66 Ill. 2d at 498. Thus, Gaffrig, Livorsi, and their amici ask us to adopt a similar prejudice requirement for breaches of a policy = s notice clauses. For two reasons, we do not find Cheek persuasive in this case. First, the appellate court in Cheek examined the differences between the r equirements of notice and cooperation. M.F.A. Mutual Insurance Co. v. Cheek , 34 Ill. App. 3d 209, 218 (1975). Relying on the concern this court expressed in Simmon for protecting injured third parties, it found that A [a]n accident victim may pr ovide the notice that an- 15 - insured neglects to give his in surer, and may thereby prevent the insurer from escaping its dut y to pay. An accident victim may not supply the cooperation that an insured fails to give his insurer, and is completely powerless to remedy the insured = s breach of the cooperation clause. @ Cheek , 34 Ill. App. 3d at 218. See also Miller v. Dilts , 463 N.E.2d 257, 265 (Ind. 1984) (addressing differences bet ween notice and cooperation clauses). Thus, conditions of notice and cooperation are not entirely similar, and Illinois courts have not treated them similarly in the past. Second, our opinion in Cheek relied in part on a collection of Illinois appellate decisions that all relied on some form of prejudice inquiry. Our decision today is similarly in accord with the predominant analysis used by the appellate court, and it is further ti ed to our own analysis in Simmon

. Cheek does not provide convincing support to alter an approach widely used by Illinois courts for decades.

Conclusion Having determined that the circuit court applied the appropriate rule in this case, we affirm its judgment. Gaffrig and Livorsi have argued only that this court should adopt the notice-prejudice rule. They hav e not argued that the circuit court misapplied our existing rule . Stated differently, they have not appealed the circuit court = s conclusion that Country Mutual
did not receive the notice to wh ich it was entitled. Thus, we express no opinion as to whether the notice in this case was reasonable. Further, we expre ss no opinion as to whether Country Mutual was prejudiced by the delayed notice. Instead, we affirm the circuit court = s legal conclusion that, in the absence of reasonable notice, Country Mutual is relieved of its duty to defend the companies. The judgment of the appellate court, which affirmed the judgment of the circuit court, is affirmed.

Judgment affirmed

.