The Indiana Court of Appeals has affirmed a trial court ruling that sided with two insurers who denied coverage after a December 2022 fire destroyed a 250,000-square-foot warehouse in Evansville. The decision clarifies how Protective Safeguards Endorsement provisions operate when a policyholder fails to notify insurers about impaired fire protection systems.
Timeline and key facts
According to court records, a maintenance contractor discovered a frozen and broken sprinkler riser at the Garvin Street Warehouse on Dec. 23, 2022. The contractor met with a sprinkler services company on Dec. 27, but repairs were not completed; the company scheduled work for Jan. 2, 2023. In the interim, the warehouse burned on Dec. 31, 2022, and the owners later notified their insurers, including Bridgeway Insurance Co. and Ascot Specialty Insurance Co., of the loss. The insurers denied the claims, saying the warehouse owner, Garvin Street Warehouse LLC, failed to comply with the PSE terms of their commercial policies.
| Date | Event |
|---|---|
| Dec. 23, 2022 | Broken/frozen sprinkler riser discovered |
| Dec. 27, 2022 | Sprinkler service consulted; repair scheduled |
| Dec. 31, 2022 | Warehouse destroyed by fire |
| Jan. 2, 2023 | Originally scheduled repair date |
Legal issue and ruling
The dispute centered on whether insurers must show they were prejudiced by the policyholder’s failure to comply with the PSE, which required notification within 48 hours of discovering any suspension or impairment of a protective safeguard. Garvin argued insurers needed to prove actual harm from the failure to notify. The appeals court agreed with the trial court that the insurers were not required to demonstrate prejudice under the policy’s terms and affirmed judgment in the insurers’ favor.
“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.”
Local consequences and context
The ruling has immediate consequences for property owners and commercial tenants in Evansville and Vanderburgh County. Policyholders who rely on automatic fire-protection systems should be aware that failure to report suspensions or impairments according to policy language may void coverage, even when the insurer has not shown it suffered demonstrable prejudice. For businesses operating large storage or distribution facilities, the case underscores the importance of prompt reporting and documentation of any impairment of safety systems.
What owners and insurers should note
- Review commercial insurance policies for PSE or similar endorsement language and notification requirements.
- Document discoveries of impaired protective systems immediately and comply with any specified reporting windows.
- Consult counsel promptly when disputes with insurers arise over coverage denials tied to maintenance or safety lapses.
The decision will likely be cited in future Indiana coverage disputes where policy conditions and timing of notice are central. It also serves as a reminder to local landlords, warehouse operators and their contractors that operational maintenance and timely communication with insurers can be as critical as physical safeguards themselves.
