The Tenth Circuit reversed a district court's determination that untimely notice of the loss was prejudicial, eliminating the insurer's coverage obligations. B.S.C. Holding, Inc. v. Lexington Ins. Co., 2014 U.S. App. LEXIS 4492 (10th Cir. March 11, 2014).    

   In January 2008, the insured's employees detected an inflow of water in a salt mine and feared dissolution of the salt or structural problems. The insured tried to devise a solution. Two and a half million dollars were spent to find the cause of the water inflow and to identify a solution.  In April 2010, the insured determined the inflow was caused by an improperly sealed oil well. In July 2010, the insured notified Lexington of the water inflow. The ultimate proof of loss was for $7.5 million, which included remediation measures that the insured had performed before notifying Lexington. 

   Lexington's all-risk policy required the insured to notify the company in writing as soon as practicable.

   Lexington sued for a declaratory judgment. Lexington's motion for summary judgment argued the insured took too long to provide notice. The district court agreed. 

   The Tenth Circuit reversed. Because Lexington presented no evidence of actual prejudice, it was not entitled to summary judgment. Lexington could not demonstrate it was prejudiced by a lost opportunity to investigate before the insured began remediation. Lexington had independently inspected the mine and failed to prove how its investigation was hampered by the delay. Nor did Lexington adequately explain how its input on remediation efforts would have affected the efforts. Finally, Lexington failed to demonstrate how the delay prevented a meaningful evaluation of risk during underwriting of the renewal of policies.