The Fifth Circuit Court of Appeals held that an excess insurance carrier is entitled to the same late-notice standards as primary insurers. In Berkley Regional Insurance Company v. Philadelphia Indemnity Insurance Company 690 F.3d. 342 (5th Cir. 2012), plaintiff in the underlying lawsuit was injured in a slip and fall case on the premises of a condominium. The condominium submitted the case for defense and protection to the primary insurance carrier. The condominium also had a excess/umbrella coverage with Philadelphia Indemnity Insurance Company. The primary carrier had a limit of one million per occurrence and the excess carrier had a limit of 20 million for liability exceeding the primary policies coverage. The jury returned a verdict for $1,654,663.50. From the day of the verdict the condominium demanded that Philadelphia pay the amount in excess of the primary coverage. This was the first time that the excess carrier had notice of the suit.
The plaintiff in this action, Berkley Regional Insurance Company through a series of transactions wound up with whatever rights the original plaintiff, the condominium and the condominium’s primary carrier had against Philadelphia. In the district court both sides moved for summary judgment and the court held as a matter of law the excess carrier was not prejudiced by the lack of notice prior to the adverse jury verdict. However, the Court of Appeals reversed saying:
“[A]s the supreme court has noted, determining whether prejudice arises from a tardy notice is a different inquiry than determining whether prejudice arises from a complete lack of notice. As in Crocker, the notice here was wholly lacking. Under the circumstances presented in the instant case, wholly lacking notice, as opposed to merely late notice, supports a finding of prejudice as a matter of law.” (citations omitted)). (P. 350)