The U.S. Court of Appeals for the Fifth Circuit on August 2 shed new light on the application of the “notice prejudice” rule to excess insurers under Texas law. In Berkley Regional Ins. Co. v. Philadelphia Indem. Ins. Co., No. 11-50595 (5th Cir. Aug. 2, 2012), the court ruled that a policyholder was not entitled to coverage from its umbrella insurer when it failed to provide notice of a claim until after a jury had entered a verdict exceeding the attachment point of the umbrella policy. When it was sued following a serious slip-and-fall incident, the policyholder tendered the claim to its primary carrier, which had issued a policy with limits of $1 million. The plaintiff’s expert estimated the damages at $1.25 million, and the defendant’s expert estimated the damages at $800,000. In mediation, the plaintiff initially offered to settle for $800,000, but the parties reached impasse in the settlement range of $150,000-$215,000. At trial, a jury awarded damages of $1,654,663.50 plus post-judgment interest and costs. Assessing Texas cases addressing the “notice prejudice” rule in the context of primary insurance, the court concluded that the umbrella insurer was prejudiced because it was not afforded an opportunity to “‘join in’ the investigation, to settle a case or claim, and to interpose and control the defense.” The court commented that, “[a]lthough we distill these principles from cases involving primary carriers, we discern no basis for a different rule for excess carriers.” While the court acknowledged that the position of an excess carrier is different from that of a primary insurer, it observed, “[O]nce the case is ‘over,’ notice is clearly too late.”