Notice-Prejudice Rule Inapplicable Where Insured Fails to Provide Any Notice Under Claims-Made Policies

The United States District Court for the District of Colorado, applying Colorado law, has held that the notice-prejudice rule does not apply to claims-made liability policies where an insured did not merely provide late notice, but failed to provide any notice directly to an insurer. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Estate of Calendine, 2022 WL 3446023 (D. Colo. Aug. 17, 2022).

In December 2019 and January 2020, dental patients brought 10 lawsuits in state court alleging negligence against a dentist, who died after the suits had been filed.

Prior to his death, the dentist had not notified his professional liability insurers of the lawsuits or entered an appearance in any of them. As a result, all 10 lawsuits went into default, and eight had default judgments entered against the dentist’s estate, with the monetary judgments amounting to $540,556.59.

In August 2020, counsel for the patients sent a letter to one of the dentist’s insurers notifying them of the underlying lawsuits; that insurer, in turn, contacted the dentist’s other insurer. The latter insurer hired defense counsel for the dentist’s estate.

The defense counsel attempted to set aside the default judgments, but those efforts were unsuccessful.