Paj, Inc., D/b/a Prime Art & Jewel, Petitioner v. the Hanover Insurance Company, Respondent

Summary

The Texas Supreme Court held that an insured’s failure to timely notify its insurer does not defeat coverage when the insurer suffers no prejudice, characterizing the notice provision as a covenant whose breach must be material to excuse performance. Accordingly, the Court reversed the Court of Appeals, entered judgment that Hanover could not deny coverage, and remanded the case for further proceedings. Justice Willett’s dissent argued that the notice provision is a condition precedent and that prejudice must be shown.