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MODIFIED OPINION UPON DENIAL OF REHEARING

JUSTICE THEIS delivered the opinion of the court:

Plaintiff, Household International, Inc. (Household), appeals from the orders of the circuit courtgranting summary judgment to certain defendant insurance companies and awarding them costs. Household sought declaratory relief and damages for the insurers' refusal to defend and indemnify it inconnection with liabilities arising out of third-party environmental claims at several of its industrial sites. The circuit court held that certain defendants had no duty to defend and indemnify Household on theground that it failed to provide timely notice of the claims as required by the policies. This courtacquired jurisdiction to hear the matter pursuant to Supreme Court Rule 304(a). 155 Ill. 2d R. 304(a).

While the matter was pending on appeal, Household settled with defendant Liberty MutualInsurance Company (Liberty), the primary insurer. Accordingly, the remaining issues involve only thoserelating to the excess and umbrella liability insurers. Household contends that the court erred inapplying New York law to some of these policies, that a genuine issue of material fact remains regardingthe reasonableness of its notice, that defendants' late notice defense is defeated by principles of estoppeland waiver, and that defendants failed to establish that they were prejudiced by any alleged late notice. Additionally, Household asserts that the court abused its discretion in awarding costs to the prevailingdefendants pursuant to section 5-109 of the Illinois Code of Civil Procedure (the Code) (735 ILCS 5/5-109 (West 1998)). For the following reasons, we affirm.

BACKGROUND

The underlying environmental claims at issue involve industrial sites in Newcomerstown, Ohio,and Fitchburg, Massachusetts, from 1965 to 1988. From 1965 to 1981, both facilities were owned andoperated by the Simonds Cutting Tools Division of the Wallace-Murray Corporation (Wallace-Murray). Wallace-Murray was a subsidiary of the Dyson-Kissner-Moran Corporation (DKM). In 1981, Wallace-Murray, including the Simonds Cutting Tools Division, was acquired by Household. Household'sownership ended in 1988, when another entity, Simonds Industries, Inc., purchased both theNewcomerstown and Fitchburg facilities. However, Household retained responsibility for theenvironmental claims at both sites.

Between 1965 and 1988, Household and its predecessors purchased comprehensive generalliability insurance policies from a variety of insurers for liabilities related to both the Newcomerstownand Fitchburg sites. The Home Insurance Company (Home) issued first-level excess coverage for theperiod 1967 to 1976 for liabilities in excess of $500,000 (policy Nos. HEC9556452, HEC9792118, andHEC4429253). The Highlands Insurance Company (Highlands) issued first-level excess coverage forthe period 1976 to 1981 for liabilities in excess of $1 million (policy Nos. XS719899, XS205151,XS205929, XS206301, and XS206366), and issued high-level excess coverage for the period 1979 to1981 for liabilities in excess of $16 million (policy Nos. SR20721 and SR21016). Allstate InsuranceCompany, as successor in interest to Northbrook Excess and Surplus Insurance Company, formerlyknown as Northbrook Insurance Company (Northbrook), issued high-level excess coverage for theperiod 1977 to 1981. These policies attached at various amounts including $5.5 million (policy No.63002719), $16 million (policy No. 63007530), and $51 million (policy Nos. 63005718 and 63006289). Century Indemnity Company (Century), as successor in interest to Insurance Company of North America(INA), issued high-level excess coverage for the period 1969 to 1975, for liabilities in excess of $5.5million (policy No. XCP-3827) and $15.5 million (policy No. XCP-3822). All of these policies wereissued to Wallace-Murray as the named insured or to DKM, its parent corporation. Additionally,Century, as successor in interest to Cigna Specialty Insurance Company, formerly known as CaliforniaUnion Insurance Company (California Union), issued high-level excess coverage for the period 1980 to1983 for liabilities in excess of $6 million (policy No. ZCX 00 4185) and $11 million (policy Nos. ZCX00 6097 and ZCX 00 6414). Those policies were issued to Household as the named insured.

Although the notice provisions in the policies vary somewhat, they are essentially consistent forpurposes of our review. The policies require the insured to give notice "as soon as practicable" in theevent of an "occurrence" for which the insured may be held liable and which is " likely to involve" thepolicy. The Home, Northbrook and INA policies also contain a "savings clause" which provides:

" '[F]ailure to give notice of any occurrence which at the time of itshappening did not appear to involve this policy but which, at a later date,would appear to give rise to claims hereunder, shall not prejudice such claim.'"

In addition to notice of an occurrence, the Highlands policies also require "immediate" notice of"claims" and "suits."

Newcomerstown site

Household and its predecessors manufactured steel files and other industrial tools at theNewcomerstown site. Historically, liquid effluents generated in connection with the manufacturingprocess were dumped into a ditch running from the plant directly into the nearby Tuscarawas River. In1964 and 1967 two lagoons were constructed at the site to receive the effluent stream to preventdischarge directly into the adjoining river, and they were used as settling ponds to remove solid wastes. A series of ditches carried the wastewater from the plant into the lagoons.

The record establishes that in June 1982, the Ohio Environmental Protection Agency (OEPA)advised Household that its waste treatment and disposal practices in connection with the two on-sitelagoons were in violation of federal and state hazardous waste regulations and required Household toinspect the lagoons for the presence of contaminants. The matter was referred to in-house counsel, whorecognized that if the water or sediment or surrounding soil contained high levels of lead and/ortrichloroethylene (TCE), the cost to remediate could be several hundred thousand dollars. As a result,outside counsel was retained to represent Household, and an environmental consulting firm was hired totest the lagoons for lead. While additionally aware of the possibility of cyanide, it did not mention thisfact to OEPA "for fear [OEPA] would require [Household] to test for the possible presence of many,many compounds."

By November 1983, OEPA evaluated the testing and agreed that Household was in "apparentcompliance" with Ohio hazardous waste regulations, "[a]ssuming that no hazardous waste enters theimpoundments in the future." However, in 1986, OEPA required more comprehensive testing of thelagoons and other related areas of the site for compliance with the Clean Water Act (33 U.S.C.