A federal appeals court affirmed that Cincinnati Insurance has no duty to defend or pay a $5.1 million wrongful-death judgment, because it learned of the underlying lawsuit far too late. 

On August 10, 2026, the US Court of Appeals for the Fourth Circuit upheld a district court ruling in the carrier's favor. 

The case began with a fatal 2013 crash. A driver working for Wilmington Shipping Company was at the wheel of a leased truck when he hit another vehicle. A passenger in that vehicle died. 

Three years later, the passenger's estate sued the driver in South Carolina state court, alleging his negligence and recklessness caused the death. He never answered. The court entered a default and referred the case to a special referee, who awarded the estate $5,100,000. 

Cincinnati said it did not learn of the case "until recently," and only after the state court had entered the default judgment. Its policies with Wilmington Shipping required prompt notice. The district court found the late notice caused "material prejudice," costing the insurer any chance "to investigate and defend the Wrongful Death Action" - enough to defeat both the duty to defend and the duty to indemnify. 

On appeal, the estate's representative challenged mainly procedural rulings, including denials of his requests to pause the case and amend his answer. The Fourth Circuit rejected each and affirmed. 

The estate's fallback will be familiar to trucking underwriters: the MCS-90 endorsement, which makes a motor carrier's insurer pay "any final judgment recovered against the insured" even when the policy would otherwise exclude the loss. 

The court held it did not apply. A federal regulation, 49 C.F.R. § 387.5, defines "insured and principal" as "the motor carrier named in the policy of insurance, surety bond, endorsement, or notice of cancellation, and also the fiduciary of such motor carrier." Because the driver was not the named insured - Wilmington Shipping was - the endorsement did not reach the judgment against him. 

For claims teams, the lesson is twofold: a late-notice defense can still defeat coverage when the insurer proves real prejudice, and the MCS-90 protects only the named motor carrier, not every driver.