                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 06-2137
THE ST. PAUL TRAVELERS COMPANIES, INC.,
F/K/A ST. PAUL FIRE AND MARINE
INSURANCE COMPANY,
                                     Plaintiff-Appellee,
                         v.


CORN ISLAND SHIPYARD, INC.,
                                              Defendant-Appellant.
                          ____________
            Appeal from the United States District Court
      for the Southern District of Indiana, Evansville Division.
             No. 04 CV 154—David F. Hamilton, Judge.
                          ____________
     ARGUED DECEMBER 7, 2006—DECIDED JULY 18, 2007
                          ____________


 Before BAUER, MANION, and SYKES, Circuit Judges.
  MANION, Circuit Judge. The St. Paul Travelers Companies,
Inc. (“St. Paul”) filed a declaratory judgment action seek-
ing a determination of its obligation, if any, to cover the
claims of a Corn Island Shipyard, Inc. (“Corn Island”)
employee under an insurance policy St. Paul had issued
to Corn Island. The district court granted summary judg-
ment in favor of St. Paul concluding that because Corn
Island failed to provide St. Paul adequate notice of its
2                                                  No. 06-2137

claim, coverage was barred as a matter of law. Although
we reach the notice issue by a different path, we affirm the
judgment for St. Paul.


                               I.
  Corn Island owns and operates a shipyard along the
Ohio River near Grandview, Indiana. Through its insur-
ance broker, Corn Island purchased several insurance
policies to cover its various liabilities, including a Workers
Compensation and Employers Liability Insurance Policy
from Fremont Industrial Indemnity Company (“Fremont”)
and an Ocean Marine bumbershoot policy from St. Paul.1
  On February 2, 2001, Rick Williams, a Corn Island
employee, sustained burns over sixty-five percent of his
body after his clothes ignited while he was cleaning paint
equipment with flammable thinner on Corn Island’s
premises. After Williams received extensive treatment,
the United States Department of Labor (“DOL”) declared
him permanently and totally disabled and entitled to
payment from Corn Island of permanent total disability
benefits under the Longshore & Harbor Workers’ Compen-
sation Act (the “LHWCA”), 33 U.S.C. § 901 et seq. Under
the policy it had issued to Corn Island, Fremont was
responsible for both Williams’s medical expenses and the


1
   A “bumbershoot” is “[a] marine insurance policy covering
multiple liability coverages in excess of one or more different
underlying policies (comparable to the Commercial Liability
Umbrella covering liabilities on land). ‘Bumbershoot’ is the
English word for ‘Umbrella’; i.e., ‘all encompassing.’ ” Glossary
of Marine Insurance and Shipping Terms, 14 U.S.F. Mar. L.J. 308,
325.
No. 06-2137                                                  3

permanent disability benefits due under the LHWCA.2
Fremont paid out under its policy $1,044,666.68 in medical
expenses and $52,236.33 in benefits, but ceased paying
benefits in the summer of 2003 when it became insolvent.
After learning of Fremont’s insolvency, Corn Island’s
insurance broker contacted the Indiana Insurance Guaranty
Association, which agreed to accept Williams’s claim up to
a maximum limit of $100,000.00.3
  On September 11, 2003, the DOL notified Corn Island
that Corn Island remained liable for Williams’s benefits
under the LHWCA despite Fremont’s insolvency. Nearly
five months later, on February 16, 2004, Corn Island
contacted St. Paul about Williams’s accident and sought
coverage for Williams’s benefits. In its response letter,
St. Paul reserved its rights under its policy to deny cover-
age and raised a potential issue of late notice and ques-
tioned whether its policy covered Corn Island’s claim.
After an investigation, St. Paul denied Corn Island’s claim
on June 21, 2004, stating, in part, that it had no obligation
under its policy for Williams’s benefits.



2
   Under the LHWCA, an employer is responsible to provide
coverage to its employees for injuries covered by the statute
and may substitute an insurance company for its obligations.
See 33 U.S.C. §§ 904, 905, 933. A “Card Report of Insurance” is
filed by an insurance company for each policy issued to an
employer. See 20 C.F.R. §§ 703.116, 703.2. Fremont was the
only insurance company designated on Corn Island’s “Card
Report of Insurance” on file with the DOL under the LHWCA.
3
  Corn Island also contacted the California state agency ap-
pointed as Fremont’s liquidator seeking recovery from Fre-
mont’s estate. To date, those efforts have not proven fruitful.
4                                              No. 06-2137

   St. Paul then filed suit seeking a declaratory judgment
that it was not obligated to pay Corn Island’s claim for
Williams’s injuries or, alternatively, if it had an obliga-
tion under its policy, that Corn Island provided late notice
of the claim thereby precluding coverage. The parties
filed cross-motions for summary judgment. Without
addressing the coverage issue, the district court granted
St. Paul’s motion and denied Corn Island’s motion. The
district court concluded that the notice provision of the
LHWCA did not apply, but rather New York law applied,
and that under New York law, Corn Island’s delay in
notifying St. Paul of Williams’s claim barred coverage as
a matter of law.
  In reaching its conclusion, the district court held that
the choice of law provision in the St. Paul policy that
elected New York law was valid and enforceable. The
district court also concluded that the LHWCA did not
apply to the St. Paul policy because Corn Island never
treated St. Paul as a carrier under the LHWCA and because
the notice provisions of the LHWCA did not apply to
excess carriers. Accordingly, the district court held that
the notice provisions of New York law governed. Because
Corn Island’s notice to St. Paul was late under New York
law, the district court concluded that coverage was
barred, regardless of whether the St. Paul policy provided
coverage for Williams’s LHWCA claims. Corn Island
appeals.


                            II.
  On appeal, Corn Island argues that the district court
erred in granting St. Paul summary judgment. Specifically,
Corn Island claims that the LHWCA governed, and not
No. 06-2137                                                   5

New York law, the issue of notice and that under the
LHWCA, it provided St. Paul with adequate notice. Corn
Island further asserts that the St. Paul policy provides
coverage for Williams’s claims. We review a district
court’s grant of a motion for summary judgment de novo.
Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) (citation
omitted).
   It is undisputed by the parties that Williams’s injuries
and resulting claims fall under the LHWCA, and that
Corn Island is responsible for those claims. What is dis-
puted, though, is whether St. Paul is obligated to provide
coverage for those claims under the policy it issued to Corn
Island. Also, while the parties do not dispute that New
York law governs the interpretation of the St. Paul policy,
the parties disagree as to whether the LHWCA or New
York law should govern the notice issue in this case. Under
the LHWCA, notice to the employer constitutes notice to
the carrier. 33 U.S.C. § 935. Under New York law, how-
ever, “compliance with the notice provisions of an insur-
ance contract is a condition precedent to an insurer’s
liability.” Am. Ins. Co. v. Fairchild Indus., Inc., 56 F.3d 435,
438 (2d Cir. 1995) (citation omitted). An insured’s failure
to provide timely notice of an injury, without a valid
reason for the delay, frees the insurer from covering
the claim. Id. Corn Island asserts that New York’s law
does not govern the question of notice because it contra-
venes the LHWCA, particularly §§ 935 and 936. St. Paul
responds that New York law does not contravene the
LHWCA, and to the extent that the LHWCA applies,
St. Paul is not a carrier under the LHWCA.
  Because it is undisputed that the LHWCA governs the
injury for which coverage is sought, we first review the
LHWCA provisions concerning insurance coverage,
6                                                     No. 06-2137

including the role established for insurance carriers,
who qualifies as an insurance carrier, and what con-
stitutes timely notice. This backdrop is necessary to
determine whether the LHWCA or New York law applies
to the notice issue in this case and ultimately to determine
whether St. Paul is obligated to cover Williams’s claims
under the policy it issued to Corn Island. We are not
addressing simply an insurance contract coverage issue
which generally would be governed by state law in a
case based on diversity jurisdiction.4 Rather, we are
determining whether a particular insurance policy pro-
vides coverage for a federal statutory-based claim which
addresses insurance carriers and notice to them. Therefore,
we must look to the LHWCA first.
   As its name suggests, the Longshore and Harbor Work-
ers’ Compensation Act is a statutory scheme “created to
compensate maritime employees for on-the-job injuries
leading to death or disability.” Bunge Corp. v. Carlisle, 227
F.3d 934, 936 (7th Cir. 2000). Under the LHWCA, employ-
ers are responsible for compensating injured employees
regardless of fault. See 33 U.S.C. §§ 904, 905. An employer
may substitute an insurance carrier for itself to discharge
its obligations and duties under the LHWCA. 33


4
  The parties also assert admiralty jurisdiction, which the
district court determined was not present in this case. While the
parties do not raise this issue on appeal, we agree with the
district court’s conclusion that because the St. Paul policy
covers both land and navigable water-based liabilities and is
not focused on maritime commerce, admiralty jurisdiction
does not extend to this case. See Norfolk S. Ry. Co. v. Kirby,
543 U.S. 14, 24 (2004); R. Maloblocki & Assoc., Inc. v. Metro.
Sanitary Dist. of Greater Chicago, 369 F.2d 483, 484 (7th Cir. 1966).
No. 06-2137                                                7

U.S.C. § 935. Specifically, Section 935 provides, in relevant
part:
    In any case where the employer is not a self-insurer, in
    order that the liability for compensation imposed by
    this chapter may be most effectively discharged by the
    employer, and in order that the administration of this
    chapter in respect of such liability may be facilitated,
    the Secretary shall by regulation provide for the
    discharge, by the carrier for such employer, of such
    obligations and duties of the employer in respect of
    such liability, imposed by this chapter upon the em-
    ployer, as it considers proper in order to effectuate
    the provisions of this chapter. For such purposes (1)
    notice to or knowledge of the employer of the occur-
    rence of the injury shall be notice to or knowledge of
    the carrier . . . .
Id. (emphasis added).
  Under the LHWCA, a carrier is “any person or fund
authorized under section 932 of this title to insure under
this chapter and includes self-insurers.” 33 U.S.C. § 902(5).
Section 932, in turn, provides:
    Any marine protection and indemnity mutual insur-
    ance corporation or association, authorized to write
    insurance against liability for loss or damage from
    personal injury and death, and for other losses and
    damages, incidental to or in respect of ownership,
    operation, or chartering of vessels on a mutual assess-
    ment plan, shall be deemed a qualified carrier to
    insure compensation under this chapter.
33 U.S.C. § 932(b).
 On appeal, St. Paul argues that it is not a carrier for
purposes of the LHWCA and therefore the LHWCA’s
8                                                 No. 06-2137

notice provisions do not apply. In support of its position,
St. Paul cites Pennsylvania National Mutual Casualty Insur-
ance v. Spence, 591 F.2d 985 (4th Cir. 1979), and United States
Casualty Company v. Taylor, 64 F.2d 521 (4th Cir. 1933),
claiming that these cases show that only those insurers
identified with the DOL as carriers qualify as carriers
under the LHWCA. However, contrary to St. Paul’s
position, neither of those cases addressed that issue.
Rather, in Spence, the Fourth Circuit addressed whether
the insurance carrier that provided coverage at the time
of an employee’s injuries was also liable for the em-
ployee’s later death that resulted from the injuries. Spence,
however, did not discuss carrier designation. Spence, 591
F.2d at 986-88. Similarly, in Taylor, the Fourth Circuit did
not address carrier designation, but instead held that an
insurance carrier had a right to intervene in a case involv-
ing an employee’s claim under the LHWCA, but did not
address that carrier’s designation. Taylor, 64 F.2d at 522-27.
Corn Island, in reply, contends that St. Paul has not
asserted that it is not authorized to underwrite insurance
under the LHWCA. Nothing in the record indicates
whether St. Paul is authorized to issue policies under the
LHWCA, that is, whether St. Paul is a carrier. Therefore, we
are unable to determine whether St. Paul is a carrier
as defined by the LHWCA. Regardless, even if St. Paul
qualifies as a carrier under Section 902, this does not
resolve whether St. Paul is Corn Island’s carrier, which is
determinative of whether New York law or the LHWCA
governs notice in this case.
  The district court noted that Corn Island had never
treated St. Paul as its carrier under the LHWCA. Whether
Corn Island ever treated St. Paul as a LHWCA carrier,
however, is inconclusive in determining whether St. Paul
No. 06-2137                                                  9

is a carrier under the LHWCA. Rather, the insurance policy
that established a relationship between St. Paul and Corn
Island dictates whether St. Paul is Corn Island’s LHWCA
carrier. See Tarantola v. Williams, 371 N.Y.S.2d 136, 139 (N.Y.
App. Div. 1975) (“Of course, the subjective notions of
parties to contracts do not determine the legal rights and
duties created by a writing of the agreement.”). See also
Feder v. Caliguira, 171 N.E.2d 316, 318 (N.Y. 1960) (“ ‘[W]e
must look to the rights it (the agreement) confers and the
obligations it imposes’ in order to determine the true
nature of the transaction and the relationship of the
parties.” (quoting New York World-Telegram Corp. v.
McGoldrick, 80 N.E.2d 61, 63 (N.Y. 1948))); EBC I, Inc. v.
Goldman Sachs & Co., 832 N.E.2d 26, 31 (N.Y. 2005) (“Gen-
erally, where parties have entered into a contract, courts
look to that agreement ‘to discover . . . the nexus of [the
parties’] relationship and the particular contractual ex-
pression establishing the parties’ interdependency . . . .’ ”
(quoting N.E. Gen. Corp. v. Wellington Adv., 624 N.E.2d 129
(N.Y. 1993))).
  In concluding that New York notice law applied, the
district court stated that Section 935 of the LHWCA (the
notice provision) did not apply to excess carriers. Neither
the district court nor St. Paul provided any citation in
support of this conclusion. Nor do we find any support
in the statutory language for the proposition that the
LHWCA does not apply to excess carriers. Rather, the
language of the statute does not address excess carriers
or differentiate between primary and secondary policies.
  The question remains, then, whether St. Paul is an
LHWCA carrier for Corn Island. The language of the
statute, particularly Section 935, requires analysis of the
policy itself to determine whether a carrier provides
10                                               No. 06-2137

coverage under the LHWCA to a company. Therefore, if
the policy creates a relationship whereby an insurance
company becomes an employer’s LHWCA carrier, then
that company is subject to the LHWCA as it relates to
insurance carriers, including the notice provision set forth
in Section 935. Thus, we turn to an analysis of the St. Paul
policy to determine if the policy provided Corn Island
coverage under the LHWCA.
  Initially, though, we pause to clarify the governing law.
In this suit where our subject matter jurisdiction is pre-
mised on diversity, Indiana’s choice of law rules determine
the applicable substantive law in this case. See Sound of
Music Co. v. Minn. Mining. & Mfg. Co., 477 F.3d 910, 915
(7th Cir. 2007) (citations omitted). Indiana “favors contrac-
tual stipulations as to governing law.” Allen v. Great Am.
Reserve Ins. Co., 766 N.E.2d 1157, 1162 (Ind. 2002) (citations
omitted). The St. Paul policy states that it “shall be gov-
erned by the internal laws of the State of New York in all
respects, including matters of interpretation and perfor-
mance . . . .” Therefore, we apply New York law as stipu-
lated in the policy.
   Under New York law, insurance contracts are to be
interpreted “based on the specific language of the policies.”
State v. Home Indem. Co., 486 N.E.2d 827, 829 (N.Y. 1985)
(citations omitted). “Contracts of insurance, like other
contracts, are to be construed according to the sense and
meaning of the terms which the parties have used, and
if they are clear and unambiguous the terms are to be
taken and understood in their plain, ordinary and proper
sense.” In re Estates of Covert, 761 N.E.2d 571, 576-77 (N.Y.
2001) (internal quotation and citations omitted). Policies
are construed “in a way that ‘affords a fair meaning to
all of the language employed by the parties in the con-
No. 06-2137                                                11

tract and leaves no provision without force and effect.’ ”
Consol. Edison Co. of New York, Inc. v. Allstate Ins. Co., 774
N.E.2d 687, 693 (N.Y. 2002) (citations omitted). Extrinsic
evidence is permitted only if the contract is ambiguous.
Krystal Investigations & Sec. Bureau, Inc. v. United Parcel
Serv., Inc., 826 N.Y.S.2d 727, 728 (N.Y. App. Div. 2006)
(citations omitted). Against this backdrop then, we con-
sider the terms of the St. Paul policy.
  As a bumbershoot policy, the St. Paul policy provides
excess coverage for underlying insurance policies. Specifi-
cally, the St. Paul policy provides, in relevant part, that
St. Paul:
    shall only be liable for the excess of either
    (a) The amount(s) of the limit(s) set out in the underly-
    ing insurances identified in the attached Schedule of
    Underlying Insurances (with respect to general aver-
    age, salvage, salvage charges, and sue and labor
    expenses, the sum(s) of said expenses actually insured
    under the underlying policies shall be deemed the
    amount(s) of said underlying policies), or
    (b) $25,000 of the Ultimate Net Loss in respect of each
    occurrence not covered by said underlying limits (all
    hereinafter called the “Underlying Limits”) and then
    only up to a further $10,000,000 of the Ultimate Loss in
    respect of each occurrence . . . .
St. Paul Policy, Insuring Agreement § II.
  “Schedule of Underlying Insurances” is defined as “those
insurance policies listed on the schedule attached to this
Policy.” The Schedule lists various policies including
the Fremont policy and contains three columns entitled
“Coverage,” “Company,” and “Primary Limits,” respec-
12                                            No. 06-2137

tively. The portion of the Schedule relevant for our con-
sideration appears as follows:

     Coverage     Company                   Primary
                                             Limits

     Workmens     Freemont Industrial        500,000/
     Compensa-    Indemnity Co. (Indi-
                                             500,000/
     tion         ana)
                                             500,000

     Longshore    JY5294328 (Indiana         500,000/
     man/Har-     USL&H)
                                             500,000/
     bor Work-
     ers                                     500,000

     Employers    Expiring 7/22/01
     Liability

     THE PRIMARY LIMIT OF LIABILITY SHOWN
     ABOVE IS THE MINIMUM LIMIT REQUIRED BY
     OUR POLICY REGARDLESS OF ANY SUBLIMIT
     THAT MAY BE CONTAINED IN THESE PRIMARY
     POLICIES.
The St. Paul policy also defines “Ultimate Net Loss” as:
     the total sum which the Assured becomes obligated to
     pay by reason of matters set out in the “Insuring
     Agreement”, Clause I, including compromise set-
     tlements, and shall include hospital, medical, and
     funeral charges and all sums paid as salaries, wages,
     compensation, fees, charges, and law costs, premiums
     on attachment or appeal bonds, interest, expenses for
     doctors, lawyers, nurses, and investigators and other
     persons, and for litigation, settlement, adjustment,
     and investigation of claims and suits which are paid
No. 06-2137                                                   13

    as a consequence of any occurrence covered here-
    under, excluding however, the salaries of the Assured’s
    regular officers and employees and general office
    overhead and also excluding in any part of such
    expenses for which the Assured is covered by other
    valid and collectible insurance.
  Corn Island asserts that it is covered by sections II(a)
and (b) of the St. Paul policy because the Schedule pro-
vides coverage in excess of $500,000 for the Fremont policy.
In response, St. Paul argues that its policy does not cover
workers’ compensation benefits, including LHWCA
benefits, because the Fremont policy provided full cover-
age for those benefits. To the extent that its policy provides
coverage in excess of Fremont’s policy, St. Paul contends
that it applies to Fremont’s employer’s liability insurance,
which has a maximum coverage of $500,000. In other
words, according to St. Paul, because Fremont provided
unlimited LHWCA coverage, there is no “excess” for its
policy to cover. St. Paul further asserts that coverage is
precluded under its policy because its policy does not
cover claims arising from insolvency, bankruptcy of the
underlying insurer, and failure to maintain underlying
insurance coverage. After setting forth the guiding in-
terpretation principles, we will address whether the
Fremont policy is incorporated into the St. Paul policy.
  While neither party claims that the St. Paul policy is
ambiguous, Corn Island objects to St. Paul’s reference to
the Fremont policy in interpreting the St. Paul policy
because Corn Island asserts the Fremont policy is not
incorporated by reference. We disagree. The St. Paul policy
expressly states that St. Paul is “liable for the excess of . . .
(a) The amount(s) of the limit(s) set out in the underlying
insurances identified in the attached Schedule of Underly-
14                                              No. 06-2137

ing Insurances . . . .” St. Paul Insuring Agreement § II(a)
(emphasis added). The St. Paul policy incorporates the
Fremont policy to ascertain Fremont’s limits. If the excess
of the limits triggering St. Paul coverage was based on the
limits set forth in the Schedule, the object of “limit(s) set
out in” would be the Schedule, not the “underlying
insurances.” In other words, “limit(s) set out in” modifies
underlying insurance, not the Schedule. For Corn Island’s
position to have merit, the St. Paul policy would have had
to state that St. Paul is “liable in excess of . . . (a) The
amount(s) of the limit(s) set out in the Schedule.” As the
policy is written, though, St. Paul is obligated to provide
coverage in excess of the limits contained in the under-
lying insurance policies, and those insurance policies are
then identified in the Schedule, which also provides the
exact primary limit amounts at which St. Paul starts
providing coverage.
  To determine the scope of St. Paul’s coverage, then, we
look to the Fremont policy to ascertain Fremont’s coverage
areas and corresponding limits. The Fremont policy
contains two parts: one entitled, “Workers Compensation
Insurance,” and another entitled, “Employers Liability
Insurance.” In addition, it has several endorsements,
including the “Longshore and Harbor Workers’ Compensa-
tion Act Coverage Endorsement” (“Endorsement”). The
Endorsement states, in relevant part:
     This endorsement applies to work subject to the
     Longshore and Harbor Workers’ Compensation Act
     in a state shown in the Schedule.
     ...
     Workers’ Compensation Law means the workers or
     workmen’s compensation law and occupational disease
No. 06-2137                                                  15

     law of each state or territory named in Item 3.A. of the
     Information Page and the Longshore and Harbor
     Workers’ Compensation Act (33 U.S.C. Sections 901-
     950).
     ...

                SCHEDULE

                                 Longshore and Harbor
                                       Workers’
                               Compensation Act Cover-
    State
                               age Percentage

    INDIANA                                108%

  Thus, the Fremont policy provides full coverage for
Corn Island’s obligations under the LHWCA for work in
Indiana. Plugging this Fremont coverage limit into sec-
tion II(a) of the St. Paul policy, we conclude there is
nothing in excess for which St. Paul is liable because the
Fremont policy provides total coverage for LHWCA
claims.5 An excess policy like St. Paul’s provides coverage
in excess of what is covered by a primary policy, and
when a primary policy, like Fremont’s, provides full
coverage for particular liabilities there is no excess to
cover.6 Therefore, based on the plain language of the St.


5
  The parties do not discuss the 108% designation in the
Fremont policy for LHWCA coverage. Certainly, though, it
does not provide less than whole and complete coverage.
6
  To the extent that “excess” coverage would be sought in the
case of insolvency as occurred with Fremont, the St. Paul policy
                                                  (continued...)
16                                                  No. 06-2137

Paul policy, and the Fremont policy incorporated by
reference, we conclude as a matter of law that the St. Paul
policy does not provide LHWCA coverage under Section
II(a). Accordingly, St. Paul is not Corn Island’s LHWCA
carrier under that section of its policy.
  Similarly, Section II(b) fails to establish St. Paul as Corn
Island’s LHWCA carrier. Section II(b) provides limited
coverage for “each occurrence not covered by said underly-
ing limits.” Again, the Fremont policy is incorporated by
reference. The “occurrence” at issue before us is Williams’s
injuries and the resulting medical care and other benefits
provided under the LHWCA. As previously discussed,
Williams’s injuries are covered by the underlying limit, i.e.,
Fremont’s full LHWCA coverage. Because everything is
covered, there is nothing in this occurrence not covered by
the underlying limits of the Fremont policy.
  Corn Island argues that the St. Paul policy “promises to
pay above amounts ‘recoverable’ from underlying insur-
ers.” However, contrary to Corn Island’s argument, Sec-
tion II(b) commits St. Paul to provide limited coverage for
‘each occurrence not covered, . . . .” Section II(b) does not
speak to questions of recoverability. As the Fifth Circuit
noted in construing an umbrella policy with the same
language as Section II(b) where the primary insurer became
insolvent, there is a distinction between coverage and
collectibility in instances such as these. Arkwright-Boston
Mfrs. Mut. Ins. Co. v. Aries Marine Corp., 932 F.2d 442, 446
(5th Cir. 1991). Section II(b) provides that St. Paul is


6
  (...continued)
explicitly states that it “shall not cover liabilities arising by
reason of insolvency.” St. Paul Insuring Agreement, § I.
No. 06-2137                                                17

obligated to provide coverage for those things not covered
by the underlying insurance policies.
    When an excess insurer uses the term “collectible” or
    “recoverable” it is agreeing to drop down in the event
    the primary coverage becomes uncollectible or unre-
    coverable; on the other hand, when an excess insurer
    uses the term ”covered” or “not covered,” it is agreeing
    to drop down only in the event that the terms of the
    underlying policy do not provide coverage for the
    occurrence or occurrences in question.
Id. at 446-47 (quoting Mission Nat’l Ins. Co. v. Duke Transp.
Co., 792 F.2d 550, 552-53 (5th Cir. 1986)). Simply stated,
“[w]hen used in this context the terms ‘covered’ and ‘not
covered’ refer to whether the policy insures against a
certain risk, not whether the insured can collect on the
underlying policy.’ ” Pergament Distrs., Inc. v. Old Republic
Ins. Co., 513 N.Y.S.2d 467, 468 (N.Y. App. Div. 1987)
(citations omitted). Thus, because Section II(b) of St. Paul’s
policy used the term “cover” and not “collectible” or
“recoverable,” Section II(b) does not provide Corn Island
LHWCA coverage.
   Corn Island attempts to overcome the impact of Section
II(b) by focusing on the “Ultimate Net Loss” exclusion
contained in the St. Paul policy. The Ultimate Net Loss
portion of St. Paul’s policy excludes coverage of ex-
penses “covered by other valid and collectible insurance.”
This “valid and collectible” language, Corn Island con-
tends, shows that the St. Paul policy provided coverage for
claims that are not “collectible.” However, contrary to Corn
Island’s position, the “Ultimate Net Loss” provision does
not establish coverage—it limits coverage. Further, the
Section II(b) which defines the excessive coverage only
applies for “occurrences not covered.” As explained above,
18                                              No. 06-2137

though, the Fremont policy provided full coverage for the
occurrence at issue in this case. Accordingly, St. Paul’s
policy does not provide coverage, and the Ultimate Net
Loss exclusion never comes into play.
  Because the St. Paul policy does not provide LHWCA
coverage, St. Paul is not Corn Island’s LHWCA carrier.
Therefore, the LHWCA’s notice provision does not apply,
and New York law governs the question of notice. Under
New York law, the lack of timely notice to an insurer,
without a valid reason for the delay, bars coverage. See Am.
Ins. Co. v. Fairchild Indus., Inc., 56 F.3d 435, 438 (2d Cir.
1995). Delays of one to two months have been found
unreasonable under New York law. Id. at 440 (citations
omitted).
  On appeal, Corn Island does not argue that its notice
was timely under New York law, focusing instead on the
LHWCA’s notice provision. However, even if contested, we
agree with the district court’s holding that Corn Island’s
notice to St. Paul was untimely. The accident at
issue occurred in February 2001, and Corn Island notified
St. Paul of the injury three years later in February 2004.
Corn Island provides no justification for the delay in
providing St. Paul notice of the claim, whether for the
three years from the date of the accident or for the five
months from when Corn Island learned from the DOL in
September 2003 that Corn Island was obligated to cover
Williams’s expenses. Further, Corn Island does not assert
any public policy that would preclude application of New
York law. See Schaffert v. Jackson Nat’l Life Ins. Co., 687
N.E.2d 230, 234 (Ind. App. 1997) (holding that another
state’s law set forth in a choice of law clause would not
apply when the other state’s law appears to be “against the
good morals or natural justice, or prejudicial to the general
No. 06-2137                                                19

interests of the citizens of this state.” (citation omitted)).
Accordingly, Corn Island’s claim is barred as a matter
of law due to late notice. Moreover, even if Corn Island
provided timely notice, as our above analysis demon-
strates, St. Paul’s policy did not provide coverage for
Williams’s claims.


                             III.
  Because the St. Paul policy does not provide LHWCA
coverage to Corn Island, St. Paul is not Corn Island’s
LHWCA carrier. As such, the LHWCA notice provision
does not apply and New York law on notice applies in this
case. Corn Island’s notice to St. Paul of Williams’s injury
was late as matter of law thereby barring coverage under
the St. Paul policy, the terms of which also do not provide
coverage for Corn Island’s claim. Accordingly, we affirm
the district court’s grant of summary judgment in favor
of St. Paul.

A true Copy:
       Teste:

                          _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit




                    USCA-02-C-0072—7-18-07
