"According to Maryland law, an insurer providing a liability insurance policy may disclaim coverage if an insured breached the policy by giving late notice of a claim and establishes by a preponderance of the evidence that late notice resulted in actual prejudice to the insurer." National U. Fire Ins. Co. v. Fund For Animals, Inc., ___ A.3d ___, No. 18, 2017 WL 383453, under Court's "Actual Prejudice" heading, page numbers not yet available from Westlaw (Md. January 27, 2017) (STATED NOT RELEASED FOR PUBLICATION IN PERMANENT LAW REPORTS AND UNTIL THEN, SUBJECT TO REVISION OR WITHDRAWAL).
"This Court has rejected a per se approach, which would allow the finding of actual prejudice for any breach by the insured—instead, the actual prejudice must be a consequence of the breach." National U. Fire Ins. Co. v. Fund For Animals, Inc., ___ A.3d ___, No. 18, 2017 WL 383453, under Court's "Actual Prejudice" heading, page numbers not yet available from Westlaw (Md. January 27, 2017).
Applying these rules in this case, the Maryland Court of Appeals held that notice of what might be called a secondary lawsuit -- a lawsuit in which the policyholder was sued, but which grew out of an earlier lawsuit filed by the policyholder -- given to the carrier some two years after the suit was filed was not late as a matter of law.
The Maryland high court held in pertinent part that the carrier could not have done anything to affect the outcome of the first suit anyway. Accordingly, notice of the second suit did not cause the carrier actual prejudice as a consequence of any potential breach of the notice condition in the liability policy. National U. Fire Ins. Co. v. Fund For Animals, Inc., ___ A.3d ___, No. 18, 2017 WL 383453, under Court's "Actual Prejudice" heading, page numbers not yet available from Westlaw (Md. January 27, 2017).
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