In American Railcar Industries v. Hartford Insurance Company, Tedder, American Railcar’s employee, was hurt while on a break at work.  Tedder sought workers compensation coverage for the claim, which was eventually denied by the Arkansas Workers’ Compensation Commission.  Then, Tedder filed a civil tort action against American Railcar (ARI) in federal court. ARI did not send Hartford a copy of the complaint. Instead, a few weeks after the complaint was filed, ARI asked Hartford’s lawyer in the workers compensation action for any discovery in that action, and attached a copy of ARI’s answer to the request.  Tedder eventually got a $1.5 Million verdict, and then ARI sued Hartford for coverage.

The trial court found that ARI’s failure to tell Hartford of the federal civil action was a violation of the policy conditions, and therefore, no coverage was owed under the policy.  The Eighth Circuit affirmed.

Under Arkansas law, if an insurance policy treats the giving of notice of a lawsuit as a condition precedent to recovery, “the insured must strictly comply with the notice requirement, or risk forfeiting the right to recover from the insurance company” and the insurance company is not required to show prejudice.

Under part four of the insurance policy, ARI was required to “[p]romptly give[Hartford] all notices, demands, and legal papers related to the injury, claim,proceeding or suit.” ARI argues that Tedder’s claims throughout the workers compensation proceedings that he would file a civil action, ARI’s counsel’s September 21 letter to Hartford’s workers compensation counsel, and an ARI employee’s conversation with Diemer all put Hartford on notice that Tedder had filed a civil action against ARI. It is undisputed, however, that ARI did not forward to Hartford all of the notices, demands, or legal papers related to Tedder’s tort action.It therefore did not strictly comply with the policy and forfeited any right to recover from Hartford.

The judgment in favor of Hartford and against the policyholder was affirmed.