The United States Court of Appeals for the Seventh Circuit recently issued an important decision under Indiana law regarding insurance coverage in instances of late notice of an occurrence, claim or suit. National Union Fire Ins. Co. of Pittsburgh v. Mead Johnson & Co. LLC, 735 F.3d 539 (7th Cir. 2013). At issue was Mead’s failure to notify its commercial general liability insurers of a $500 million suit for false advertising until after trial ended in a $13.5 million verdict against Mead. The Court stated while Mead had failed to comply with the notice provisions in its insurance policies, under Indiana law, such failure allowed an insurer to deny coverage only if the insurer was prejudiced. While the law created a presumption of prejudice when notice is late, the insured can put forth evidence to rebut that presumption. The lower court had ruled that when notice is untimely given after trial, there is an irrebuttable presumption that the insurer was prejudiced. The Seventh Circuit held that this ruling was incorrect and that even when notice is given after trial, the presumption of prejudice is rebuttable. The Court explained the insured can rebut such presumption by showing that the “insured inflicted no cost on the insurer by untimely notice, with the result that the insurer lost nothing by virtue of the untimeliness.” If it were otherwise, the Court explained, then the insurer would receive a windfall by avoiding coverage even though it had not been injured. The Court remanded for a determination on this issue. In a separate section of the opinion, the Court determined a different issue – that a consumer class action for fraud was not covered by Mead’s policy because it did not fall within the policy’s coverage for product disparagement.