An Indiana appeals court says a missed sprinkler-notice deadline can sink a fire claim - and insurers need not prove it caused harm.
On July 15, 2026, the Court of Appeals of Indiana answered a question coverage lawyers long debated: does a late-notice slip void a claim only when it truly hurts the insurer? For one class of provisions, the answer favored the carriers.
The court affirmed a lower court's rulings in a dispute involving a group of insurers including Ascot Specialty Insurance Company. At the center was a Protective Safeguards Endorsement, or PSE - the clause that ties coverage to keeping a sprinkler system, alarm, or similar safeguard in working order.
The facts were not in dispute. Garvin Street Warehouse, LLC and KSAB, LLC (collectively, "Garvin") owned a warehouse in Evansville. On December 23, 2022, a contractor found one of the twenty risers in the sprinkler system frozen and broken. A repair company could not fix it on December 27, so the work was pushed to January 2, 2023. On December 31, 2022, the warehouse caught fire and was destroyed.
The PSE said the insurers did not need notice of a sprinkler problem if full protection was restored within 48 hours. Garvin could not restore it in time and gave no notice. When Garvin reported the fire, the insurers denied the claim.
Here is what claims teams should note. Garvin argued the insurers had to prove they were actually harmed by the silence - "prejudiced," in legal terms - before it could walk away. It leaned on an earlier Indiana Supreme Court ruling about late notice after a loss, telling the court that "Allowing carriers to deny coverage based on a lack of notice even though they are not prejudiced is simply unjust."
The court disagreed. It split conditions that apply after a loss from conditions that must be met before coverage attaches. A PSE, it said, is the second kind - so the insurers did not have to show prejudice, only that the language was clear.
The court had not faced this exact question in Indiana before. It agreed with the insurers that "Indiana courts have a long, consistent history of enforcing unambiguous exclusions as they are written, without considering prejudice."
The trial court had denied Garvin's motion and granted judgment to the insurers; the appeals court affirmed both. The upshot for underwriters and claims teams: in Indiana, a clearly drafted protective safeguards endorsement can defeat coverage on its own terms when a policyholder misses a pre-loss condition.
