(Article from Insurance Law Alert, February 2026)
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Holding
Applying Alabama law, the Eleventh Circuit held that late notice barred coverage for a $10 million invasion-of-privacy award. The court found a 58-month delay precluded coverage even though the delay was the policyholder’s fault and not the tort plaintiff who had sued the insurer under Alabama’s direct action statute to satisfy the judgment against the policyholder. A.B. v. Barrow, 163 F.4th 1336 (11th Cir. 2026).
Background
The policyholder, Barrow, was insured under an umbrella liability policy issued by Nationwide Mutual Insurance Co. Barrow allegedly abused a minor, A.B. A.B. filed two lawsuits against Barrow, one for invasion of privacy and the other under Alabama’s Fraudulent Transfer Act. A.B. was awarded $10 million in damages in the invasion-of-privacy suit. During discovery in the fraudulent transfer litigation, A.B.’s attorney became aware of the Nationwide policy. A.B. then sued Nationwide under Alabama’s Direct Action Statute to satisfy the $10 million judgment. The district court entered summary judgment for Nationwide.
Although Nationwide received constructive notice in 2018 of Barrow’s 2013 conduct when A.B.’s attorney served a subpoena on Nationwide, the district court determined that the 58-month delay in giving notice required a reasonable excuse and that Barrow “offered no excuse or explanation for his failure to notify Nationwide.” The district court further held that A.B.’s ignorance of the policy’s existence did not excuse the delay because Alabama law is clear that “the excuse is tied to the policy holder.”
Decision
The Eleventh Circuit affirmed, holding that notice was untimely under Alabama law. In its timeliness determination, the court examined two issues: (1) whether the policy permitted A.B’s attorney to provide notice on Barrow’s behalf; and (2) whether notice was given “as soon as reasonably possible,” as required by the policy.
The policy language required Barrow, the insured, “or someone on [his] behalf” to provide written notice to Nationwide of the occurrence as “soon as reasonably possible.” After detailing Alabama precedent recognizing that an injured party may provide notice, the court held that “A.B.’s attorney was authorized to provide notice under the policy and did so in Barrow’s interest and benefit” because the attorney was “attempting to satisfy a condition precedent that would increase Barrow’s chances of obtaining coverage.”
Despite finding the notice provided by A.B.’s attorney was authorized, the Eleventh Circuit concluded that it was untimely. The court explained that, under Alabama law, the timeliness inquiry “turns not on equitable considerations but on the reason for the delay itself,” and that the relevant perspective is the insured’s—not a third party’s. It was therefore irrelevant that A.B.’s attorney had a reasonable excuse for giving notice 58 months after the occurrence and acted promptly after discovering the policy. Under Alabama law, even a five-month delay “require[s] the insured to offer evidence of a reasonable excuse for the delay,” and neither Barrow nor A.B. provided any excuse for Barrow’s delay between the 2013 occurrence and the 2018 notice.
Comments
In ruling that the policyholder’s delay in providing notice precluded the tort plaintiff from recovering from the insurer directly, the Eleventh Circuit noted that, although the policy authorized notice from a person on behalf of Barrow, “it does not reset the notice clock for that person.” The court also emphasized that, as a third-party claimant proceeding through Barrow, A.B. could not “obtain greater rights under the policy than Barrow himself possessed.”