Appeals court upholds decision for insurers over Evansville fire that destroyed warehouse 

The Indiana Court of Appeals has affirmed a trial court’s decision in favor of two insurance companies who denied a customer’s claims for coverage after a fire destroyed a 250,000-square-foot warehouse in Evansville in December 2022. 

The appeals court said the trial court was right when it found that the insurance companies were not required to demonstrate prejudice due to the owners’ failure to comply with a Protective Safeguards Endorsement in the insurance policy.  

On Dec. 23, 2022, a maintenance contractor discovered that one of 20 risers in a sprinkler system inside the warehouse owned by Garvin Street Warehouse LLC, was frozen and broken. The contractor met with a sprinkler services company on Dec. 27, but the company was not able to fix the riser on that day and instead scheduled repairs for Jan. 2, 2023.  

However, the warehouse caught fire on Dec. 31, 2022, and was destroyed.  

The owners of the warehouse notified their insurance companies, including Bridgeway Insurance Co. and Ascot Specialty Insurance Co., of the fire after the fact, but the insurers denied their claim, arguing Garvin failed to comply with the Protective Safeguards Endorsement, or PSE,  portion of the commercial insurance policies. The PSE, in part, states that the insurance companies would not pay for loss or damages caused by a fire if the policyholder “knew of any suspension or impairment in any protective safeguard” and “failed to notify us of that fact.”  

According to the policy, Garvin should have notified insurers about the issue with the sprinkler system within 48 hours of discovering it was broken.  

Garvin filed a complaint against insurers in June 2024, arguing that the insurers needed to prove that they were actually harmed by Garvin’s failure to notify them of the sprinkler system issue within 48 hours. Garvin argued that the insurance companies were not prejudiced by that failure, and that, even if Garvin would’ve notified insurers about the issue, they still wouldn’t have covered their claim.

In March 2025, Garvin filed a motion for partial summary judgment against insurers, who responded that Garvin failed to comply with the PSE, and that the prejudice cases Garvin cited involved post-loss policy conditions. This case, they argued, involved pre-loss policy conditions, as Garvin was required to notify insurers of any issues before a loss occurred. 

The Vanderburgh Superior Court denied Garvin’s motion for partial summary judgment in August 2025, finding that the insurers were not required to show prejudice. Garvin’s failure to notify insurers of the sprinkler system alone precluded coverage, according to court documents.  

The Indiana Court of Appeals upheld the trial court’s ruling.  

Attorneys for the parties did not immediately respond to a request for comment. 

In an opinion written by Judge Elizabeth Tavitas, the court stated that insurance companies are not required to demonstrate prejudice according to Indiana law and federal court decisions.  

Judges Peter Foley and Leanna Weissmann concurred, with Weissmann writing in a separate opinion that, while she agrees with the court’s conclusion, she reached the conclusion not based on pre-loss and post-loss policy breaches but instead through covenants and conditions precedent.  

Unlike covenants, which allow beneficiaries the right to pursue remedies if certain duties are breached, conditions specify that events must occur before a promise becomes a precedent – conditions can’t be breached in the ordinary sense but can only go unfulfilled, according to Weissmann.  

In this case, the PSE exclusion unambiguously conditioned that insurers would fulfill their duties only if Garvin notified them of the sprinkler issue. Because the company didn’t, it failed to fulfill the condition precedent and therefore cannot expect to receive a claim for the loss.  

The case is Garvin Street Warehouse, LLC, et al. v. Ascot Specialty Insurance Company, et al., 25A-PL-02272.